Heat market for interconnected multi-energy microgrids: A distributed optimization approach

Thermal networks, part of heat-and-power multi-energy microgrids, may face capacity issues, generation and distribution ones, either due to the increase in the requested demand or capacity underused, which is sized for peak hours. Under-capacity issues may be addressed with generation and pipeline capacity expansion, resulting in considerable capital costs and extra maintenance costs. In the case of over-capacity, better usage of the existing assets may bring further revenues and increase the multi-energy microgrid’s overall energy efficiency. In the electricity sector, it is being considered the interconnection of microgrids via the distribution system network, since microgrids can operate in both islanded and network-connected modes. In this work, in a similar fashion, we propose the interconnection of adjacent thermal networks enabling direct heat trading among them to increase the micro-grids’ supply flexibility, help meeting demand peaks, and reduce operational costs. Examples of integrated heat-and-power microgrids that could benefit from thermal interconnections are industrial parks, university campuses, hospitals, and even residential complexes with a shared heat generator. This paper presents a market model for the optimal heat transfer between thermally interconnected heat-and-power microgrids. The resulting model is a convex quadratic programming model that enables the derivation of heat transfer prices that guarantee a competitive equilibrium. Furthermore, we performed numerical tests to explore the impact of connection topology, thermal power transfer capacity, and interconnection efficiency on transferred energy and prices.