In this study, a hierarchical decision making framework for operation of active distribution grids (ADGs) in which distribution company (Disco) and microgrids (MGs) cooperate with each other is modelled. Since there are several MGs, which may have independent decision makers, in ADGs, two levels of decision makers are considered in this framework. The mentioned framework is modelled as a bi‐level optimisation problem in which Disco and MGs are considered as the leader and the followers, respectively. The resulting model is a non‐linear bi‐level problem which is transformed into a linear single‐level problem through Karush–Kuhn–Tucker conditions and dual theory. To evaluate the effectiveness of the model, a hypothetical distribution grid is considered as the case study.
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Bahramara et al. (2015) studied this question.