The need for improved utilization of existing system assets and energy sources, as well as the smooth incorporation of new technologies (such as electric vehicles) into the grid, has prompted the participation of small power consumers and generators in the energy markets. A problem of such scale however cannot be managed in a centralized manner in its full detail. This paper examines the idea of a decentralized approach in clearing the energy market. A general framework for the problem decomposition and its distributed solution is presented and analyzed.

A key point of interest in this work is the fundamental question of how far decomposition may be pursued for a given system, while still achieving reasonable convergence properties. The corresponding optimization problem is formulated and solved through a parallel implementation of the alternating direction method of multipliers (ADMM). A thorough investigation of its convergence properties is conducted, and through its coordination with an additional proximal based decomposition method, we improve its scalability characteristics.