An algorithm for renewable energy allocation and trading in a microgrid

In this work we address the distribution of PV power generated in a microgrid connected to the main grid. Instead of self-consumption maximization, the new goal is to enable the local trade between PV producers and neighbors consumers in the microgrid. We propose a "many-to-many" lexicographic allocation and balancing algorithm between producers and consumers, compare its performance in terms of total welfare with the state of the art scheme, the double auction. The proposed mechanism is simple, requires less input data (no consumer bids) and facilitates long term price stability and continuity. The model extends to consider the grid costs which occur when producer and consumer are not co-located and need the distribution system operator (DSO) infrastructure. Numerical results show that the proposed algorithm outperforms in this case the double auction, which cannot deal with location information.