Offer‐Making Model for Aggregators of Prosumers Under Network Security Constraints and Complex Market Environment

ABSTRACT Current policies facilitate the involvement of prosumer aggregators in the wholesale market on the distribution side. However, the wholesale market’s disregard for distribution network security constraints may lead to potential security issues when aggregators deliver the awarded power. Furthermore, the electricity market operates within a multi‐party offer framework, rendering the competitive behaviour of aggregators’ rivals unpredictable. The relationship between locational marginal prices and the offer of prosumer aggregators is further complicated by the coupling of transmission and distribution systems. These factors contribute to the complexity of the decision‐making process for prosumer aggregators. This paper introduces a comprehensive offer model for prosumer aggregators that incorporates network security and the intricate market environment. Initially, we develop optimisation decision‐making models for various market participants, providing examples of their decision‐making behaviours. Subsequently, we explore the interactive dynamics among market entities and formulate a mathematical optimisation model for prosumer aggregators that integrates network security constraints and the complexities of market decision‐making. Additionally, we establish a multi‐party game model that considers offer strategies of all participants. Finally, we propose simplified solution strategies to address the challenges associated with diverse application scenarios. Case studies conducted on a 69‐bus distribution network validate the effectiveness of the proposed model.