Virtual microgrids: A management concept for peer-to-peer energy trading

The proliferation of distributed energy resources (DERs) and smart technologies has enabled the integration of microgrid generation into the energy supply chain. This paper proposes the use of energy trading agents (ETA) in the overlaying communication system in a neighbourhood area network (NAN) in which a number of microgrids (MGs) are grouped together into logical clusters called virtual MGs (VMGs) to minimize operational costs. To decouple the communication network from the grid topology and study the communication performance, each VMG is assigned an ETA such that prosumers in a VMG exchange messages only with the ETA rather than uncontrolled messaging in the network. Although this reduces the amount of network traffic, a key question is on how to determine the optimal location of the ETAs. For VMGs of regular shapes, we formulate this as a simple minimization problem of Euclidean distances of regular shapes. Our results show that by employing ETAs, the model reduces the distance traversed by a prosumer by 40%.