Optimal Operation of Smart Grids in an Open Energy Market Environment

The control architecture for well functioning open electricity market of smart grids is introduced. The novel concept is that it establishes near real-time market operators for smart grids. In the proposed market model, traders, producers, brokers and end-users are incorporated. It develops near realtime active and reactive power dispatch policies based on optimal operation of players. In realizing electricity markets, one usually refers to active power markets, neglecting ancillary services such as reactive power and voltage control, which usually leads to sequential activities that may lead to inefficiencies because active and reactive powers are coupled. In this paper, a unified model to combine active and reactive allocation procedures based on a market approach as a way to ensure optimal operation. The resulting optimization problems can be solved by modern heuristic approaches that allow one to compute active and reactive nodal marginal prices at its final iteration.