A Hybrid Approach Based on LMP and VCG Mechanism to Create a Positive Interaction Between Distribution Companies and Owners of DG Units

Nowadays, with the expansion of electric energy distribution networks and the increasing penetration of distributed generation (DG) units in these systems, the existence of a solution to create a positive interaction between distribution companies and owners of DGs is felt. In this paper, a hybrid locational marginal pricing (LMP)-based approach with Vickrey-Clarke-Groves (VCG) optimization is presented, focusing on the benefit of energy consumers. Initially, LMPs of DG units are optimized by the modified grey wolf optimization (MGWO) algorithm, which is combined with a decision tree (DT) model to identify the most optimal solutions in each iteration. Subsequently, the consumer benefit is calculated by comparing the initial market price and the obtained LMPs for the DGs, and ultimately, the profit of the DGs owners is determined based on the VCG mechanism. The simulation has been conducted on a California 201-node test distribution system under the MATLAB software. The simulation results showed the effectiveness of the proposed method in reducing network losses, assigning LMPs to DG units, and increasing the profits of DGs owners compared to previous methods.