Strategic Behavior of Multi-Energy Players in Electricity Markets as Aggregators of Demand Side Resources Using a Bi-Level Approach

The coordination of various energy vectors under the concept of multi-energy system (MES) has introduced new sources of operational flexibility to system managers. In this paper, the behavior of multi-energy players (MEP) who can trade with more than one energy carrier to maximize their profits and mitigate their operational risks has been investigated. The MES is represented based on a multilayer structure, namely the energy market, MEP, the local energy system (LES), and multi-energy demand. In such environment, an MEP aggregates LES and participates in the wholesale electricity market, simultaneously to maximize its profit. The decision-making conflict of the MEP with other energy players for the aggregation of LES and participation in the electricity market is modeled based on a bilevel approach. Numerical results show the behavior of the MEP as a prosumer in the electricity market to produce smoother demand and price profiles. Results reveal a mutual effect of local and wholesale equilibrium prices by increasing the share of the MEP.