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Distributed, consensus-based algorithms have emerged as a promising approach for the coordination of distributed energy resources (DER) due to their communication, computation, privacy and reliability advantages over centralized approaches. However, state-of-the-art consensus-based algorithms address the DER coordination problem in independent time periods and therefore are inherently unable to capture the time-coupling operating characteristics of flexible demand (FD) and energy storage (ES) resources. This paper demonstrates that state-of-the-art algorithms fail to converge when these time-coupling characteristics are considered. In order to address this fundamental limitation, a novel consensus-based algorithm is proposed which includes additional consensus variables. These variables express relative maximum power limits imposed on the FD and ES resources which effectively mitigate the concentration of the FD and ES responses at the same time periods and steer the consensual outcome to a feasible and optimal solution. The convergence and optimality of the proposed algorithm are theoretically proven while case studies numerically demonstrate its convergence, optimality, robustness to initialization and information loss, and plug-and-play adaptability. [ABSTRACT FROM AUTHOR]

The envisaged decarbonisation of electricity systems has attracted significant interest around the role and value of energy storage systems (ESSs). In the deregulated electricity market, there is a need to investigate the complex impacts of ESSs, considering the potential exercise of market power by strategic players. This study aims at comprehensively analysing the impacts of both price‐taking and price‐making storage behaviours on energy market efficiency, corresponding to potential settings with small and large storage players, respectively. In order to achieve this and in contrast to previous papers, this work develops a multi‐period equilibrium programming market model to determine market equilibrium stemming from the interactions of independent strategic producers and ESSs, while capturing the time‐coupling operational constraints of ESSs as well as network constraints. The results of case studies on a test market capturing the general conditions of the GB electricity system demonstrate that the introduction of ESSs mitigates market power exercise and improves market efficiency, with this beneficial impact being higher when ESSs act as price takers. When the electricity network is congested, the location of ESSs also affects the market outcome, with their beneficial impact on market efficiency being higher when they are located in higher‐priced areas. [ABSTRACT FROM AUTHOR]

• Local energy markets enable direct energy trading among participating customers. • The interactions among electricity retailers and local energy markets are modelled. • A novel approach is employed for solving the developed bi-level optimization model. • Local energy markets are shown to enhance the competitiveness of retailers. • Local energy markets are shown to increase the economic surplus of the customers. Local energy markets (LEM) have recently attracted great interest as they enable effective coordination of small-scale distributed energy resources (DER) at the customer side, and avoidance of distribution network reinforcements. However, the introduction of LEM has also significant implications on the strategic interactions between the customers and incumbent electricity retailers. This paper explores for the first time these interactions by proposing a novel multi-period bi-level optimization model, which captures the pricing decisions of a strategic retailer in the upper level (UL) and the response of both independent customers and the LEM (both including flexible consumers, micro-generators and energy storages) in the lower level (LL). Since the LL problem representing the LEM is non-convex, a new analytical approach is employed for solving the developed bi-level problem. The examined case studies demonstrate that the introduction of an LEM reduces the customers' energy dependency on the retailer and limits the retailer's strategic potential of exploiting the customers through large differentials between buy and sell prices. As a result, the profit of the retailer is significantly reduced while the customers, primarily the LEM participants and to a lower extent non-participating customers, achieve significant economic benefits. [ABSTRACT FROM AUTHOR]