Microgrid/Macrogrid Energy Exchange: A Novel Market Structure and Stochastic Scheduling

Michael Zachar, Prodromos Daoutidis

Research output: Contribution to journalArticlepeer-review

38 Scopus citations


This paper explores the stochastic scheduling of microgrids where energy exchange with the macrogrid must be coordinated ahead of time. In particular, a market structure is proposed in which microgrid operators make day-ahead energy exchange commitments. Microgrids are fined for deviating too far from commitments and a maximum difference between commitments in subsequent hours is enforced. These constraints are included to reduce the burden placed on the macrogrid by distributed generation. Under this market structure, a scheduling problem is formulated for a microgrid system consisting of microturbines, a photovoltaic array, a battery bank, and a bi-directional connection to the macrogrid. Chance-constrained optimization is used to minimize operational cost and ensure the energy exchange commitments are met. The problem is transformed into a mixed integer linear program, and is solved to show that these commitments can be satisfied with a high level of certainty and to illustrate inherent tradeoffs between microgrid performance and level of regulation.

Original languageEnglish (US)
Article number7544607
Pages (from-to)178-189
Number of pages12
JournalIEEE Transactions on Smart Grid
Issue number1
StatePublished - Jan 2017

Bibliographical note

Funding Information:
This work was supported in part by the National Science Foundation Graduate Research Fellowship Program under Grant 00039202, and in part by the University of Minnesota's Initiative for Renewable Energy and the Environment under Project RL-0010-13. Paper no. TSG-00065-2016.

Publisher Copyright:
© 2016 IEEE.


  • Energy management
  • optimization methods
  • power generation planning
  • power systems
  • stochastic systems


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