Hybrid and Decentralized Local Market Design Considering Joint Energy and Reserve Trading

Power market players are becoming more proactive as distributed energy resources rise, which encourages the employment of local energy markets (LEMs) in modern power systems. In this environment, community-based markets (CBMs) and peer-to-peer (P2P) trading are two innovative designs developed for LEMs. However, each has significant drawbacks, such as slow rate convergence and unpredictable system behavior for P2P architecture, as well as obtaining and optimizing large-scale data in CBM. This research proposes a novel architecture for LEM based on cooperative energy trading and a reserve market, which can overcome the shortcomings of existing designs. Two-stage modeling is proposed, and the consensus alternate direction method of multipliers is utilized to clear the market in a decentralized manner to demonstrate the players' preferences, preserve privacy, and distribute the computation burden. Moreover, the model analyzes Tokyo's Japan Electric Power Exchange market. To highlight its benefits, the proposed structure is compared to other structures. According to the findings, CBM and P2P transaction volumes are 12.78% and 71.9% less than the proposed architecture, respectively. The proposed design's imports and exports are 35.1% and 38.2% lower than CBMs, and overall imports and exports are 77.88% and 74.24% less than P2P.