Risky bilateral contract for distributed wind energy in smart microgrid

Abstract

This paper proposes a novel risky bilateral contract for trading distributed wind energy with flexible load in smart microgrid. Due to the randomness of wind energy production, wind energy can barely be traded at a pre-determined quantity. While in smart grid, load demand of electricity consumer can be easily adjusted (reduced or shifted) without decreasing its satisfaction, which can be utilized for integration of distributed wind energy. As a result, the wind power producer benefits from fewer penalties caused by less deviation between real-time traded quantity and pre-offered one. The electricity consumer, on the other hand, benefits from a decreased electricity bills without reducing its satisfaction. We take into account distributed wind energy, three categories of household appliances, and batteries. The Nash bargaining theory is used to determine the price of risky bilateral contract. Case studies are then conducted to demonstrate the efficiency of the risky bilateral contract.