Privacy-Preserving Collaborative Operation of Networked Microgrids with the Local Utility Grid Based on Enhanced Benders Decomposition

Abstract—In this paper, a privacy-preserving decision-making the framework is developed for a collaborative operation of networked microgrids and the local utility grid, where the distribution system operator (DSO) interacts with microgrid master controllers (MCs) in a leader-followers fashion. First, the paper models the decision-making in the collaborative operation presented as an integrated mixed-integer second-order cone programming problem that satisfies various technical and operational requirements in a look-ahead manner. Then, the integrated optimization problem is decomposed into a master problem and a set of subproblems to decentralize the decision-making process of DSO and MCs. The master problem is solved by DSO for optimizing the local utility grid operation, and the subproblems are solved independently by MCs for optimizing the operation of individual microgrids. We propose an enhanced Benders decomposition algorithm to guide the iterations between the master problem and subproblems. In particular, an enhanced approach is introduced in the Benders decomposition algorithm for generating valid cutting planes from mixed-integer linear programming subproblems. Mathematically, the proposed algorithm can find the globally optimal solution after a finite number of iterations. Accordingly, DSO and MCs manage to collaborate on making operational decisions that would maximize the social welfare without compromising independent decision- making and privacy provisions. Numerical experiments are conducted on a simplified two-bus system and a modified IEEE 123-bus system. The results validate the efficiency, robustness, and scalability of the proposed collaborative decision-making framework in power systems.