Multi-energy offering strategies in coupled electricity-heat-gas markets

With the increasing interdependence among the electricity, district heating, and natural gas systems in economy and physics, this paper focuses on the optimal bidding problem of the dominant gas-fired CHP unit in synchronized electricity-heat-gas markets with real-life step-wise energy offer format. The gas-fired CHP generators act as price makers and submit price-quantity offering curves in independently cleared electricity and district heating markets. A novel loss-embedded power flow model is proposed for market clearing which accounts for active power loss, congestion, reactive power flow, and voltage constraints. Adding penalty terms into the objective function eliminates the additional binary variables, which eases the computation burden. A two-stage trading mechanism is designed for the gas-fired CHP generators to simultaneously participate in the multi-energy market. Based on the mathematical program with equilibrium constraints, an optimal bidding model is established in which the bilinear terms are eliminated by applying the binary expansion method. The diagonalization algorithm can be nested in the proposed trading mechanism if we intend to study the Nash equilibrium of the N-person Cournot oligopoly market. Numerical tests with different scales are carried out to validate the proposed methodology in detail.