Distributed optimization for transactive energy management in interconnected multi-microgrid systems

The rapid proliferation of renewable energy resources, battery energy storage systems (BESSs), and flexible loads has increased the operational complexity of interconnected multi-microgrid systems, creating the urgent need for effective and decentralized energy management strategies. In this context, this paper proposes a framework for Distributed Transactive Energy Management (DTEM), leveraging the Alternating Direction Method of Multipliers (ADMM), aimed at transactive energy transfer to achieve coordinated operation of interconnected microgrids. The proposed framework simultaneously schedules dispatchable generators, battery energy storage systems, flexible loads, and peer-to-peer energy exchange, aiming to minimize the overall operating cost while preserving the operational privacy of individual microgrids through information exchange between neighboring grids. The convex optimization problem is formulated by incorporating generation costs, battery degradation costs, energy trading costs, and the utility associated with flexible loads, together with operational and grid constraints. This optimization problem is decomposed into independent local sub-problems, enabling each microgrid to determine its operating schedule without the need for a centralized coordinator. Furthermore, the convergence of the distributed algorithm to the optimal solution is demonstrated under standard convex optimization assumptions. Simulation results demonstrate that the proposed DTEM framework effectively coordinates distributed energy resources, improves resource utilization, reduces reliance on utility-grid energy, and reduces the total operating cost while satisfying all operational constraints. These results highlight the effectiveness of the proposed approach as a scalable, computationally efficient, and privacy-preserving solution for distributed energy management in interconnected multi-microgrid systems.