  In recent years, significant efforts for improving the technical and the
economic performance of smart grids have been applied with the presence of
different players making decisions in these grids. This paper proposes a
bi-level hierarchical structure for designing and planning distributed energy
resources in home microgrids (H-MGs). Such a small-scale grid inside the market
environment permits energy exchange among distributed energy resources and home
microgrids through a pool market. In this paper, each home microgrid's planner
maximizes the performance of distributed energy resources while exchanging
energy with other H-MGs. The problem is formulated as a high-level problem
decomposed into a set of low-level market clearing problems. The global optimal
performance in terms of energy cost is met for a market structure (H-MGs,
consumers, and retailers) at a Nash optimum point for the formulated scheduling
game considering local and general constraints on the spot market. In general,
the upper-level structure is based on H-MG generation competition for
maximizing their individual and/or group income in the process of forming
coalition with other H-MGs. In addition, the functionality of the lower-level
of the hierarchical structure is governed by a market clearing based on the
price response method by all the DERs enabling H-MGs to change the spot market
strategic behavior. Prices are obtained as dual variables of power balance
equations. This paper will investigate a set of bilevel games, including
nonlinear programming problems solved through a complementary problem method.
Using the binary theory, the bilevel hierarchical structure will be replanned
using a nonlinear problem. Results prove that the proposed structure can
increase the players's profit.
