An Energy Trading Model with Battery Social Welfare Assessment for Local Energy Market

The global energy transition towards sustainable and decentralized energy systems has highlighted the importance of optimizing Local Energy Markets (LEM). This paper presents a mathematical model to solve energy trading problem between the nodes in a microgrid within a LEM with an objective function of maximizing the social welfare of the microgrid. In this model, we developed a utility function that represents the willingness of the batteries to sell their energy, promoting their involvement in the LEM. Additionally, we proposed a pricing method that differentiates between various types of prices (internal prices, battery prices, and main grid prices) to encourage nodes to participate in the LEM rather than relying on the main grid. Results indicate that the integration of batteries into the LEM reduces energy costs for each node and ensures self-sufficiency.