A cross-carrier multilateral trading model for integrated electricity and natural gas systems

Multi-carrier systems have become an important research topic in view of electricity and gas systems synergies. We present a new model for the cross-carrier multilateral economic dispatch (MED) problem to account for transmission losses and network constraints in the integrated electricity and gas systems. To associate multilateral trades more effectively with the losses occurring in the network, the loss allocation ratio between suppliers and consumers involved in multilateral trades is introduced in the loss allocation policy. Two sets of reciprocity constraints are presented to ensure the equilibrium between production and consumption, both physically and economically. The price decomposition involved in multilateral trades is developed based on cross-carrier MED with product differentiation (PD). Combined with characteristics of price decomposition, an effective payment to keep less trading information access by the network operator in the decentralized market is presented. Numerical results show that when all losses are allocated to consumers, the MED model without PD performs similarly to a pool-based market model. It is also demonstrated that the inclusion of agents' preferences in the MED model can improve total social welfare.