Price-Based Market Clearing with V2G Integration Using Generalized Benders Decomposition

TL;DR

This paper introduces a generalized Benders decomposition approach to efficiently solve a complex, nonlinear market clearing problem incorporating Vehicle-to-Grid (V2G) technology, aiming to improve payment consistency and computational performance.

Contribution

It presents a novel MINLP formulation for payment cost minimization in V2G-integrated markets and develops a GBD-based solution method for large-scale systems.

Findings

The GBD method demonstrates fast convergence and high computational efficiency.

V2G integration impacts market clearing prices and payments.

The proposed approach scales well with increased decision variables.

Abstract

Currently, most ISOs adopt offer cost minimization (OCM) auction mechanism which minimizes the total offer cost, and then, a settlement rule based on either locational marginal prices (LMPs) or market clearing price (MCP) is used to determine the payments to the committed units, which is not compatible with the auction mechanism because the minimized cost is different from the payment cost calculated by the settlement rule. This inconsistency can drastically increase the payment cost. On the other hand, payment cost minimization (PCM) auction mechanism eliminates this inconsistency; however, PCM problem is a nonlinear self-referring NP-hard problem which poses grand computational burden. In this paper, a mixed-integer nonlinear programing (MINLP) formulation of PCM problem are presented to address additional complexity of fast-growing penetration of Vehicle-to-Grid (V2G) in the price-based market clearing problem, and a solution method based on the generalized benders decomposition (GBD) is then proposed to solve the V2G-integrated PCM problem, and its favorable performance in terms of convergence and computational efficiency is demonstrated using case studies. The proposed GBD-based method can handle scaled-up models with the increased number of decision variables and constraints which facilitates the use of PCM mechanism in the market clearing of large-scale power systems. The impact of using V2G technologies on the OCM and PCM mechanisms in terms of MCPs and payments is also investigated, and by using numerical results, the performances of these two mechanisms are compared.