Supply–demand balancing for power management in smart grid: A Stackelberg game approach

Mengmeng Yu and Seung Ho Hong

Applied Energy, 2016, vol. 164, issue C, 702-710

Abstract: Demand-response (DR) is regarded as a promising solution for future power grids. Here we use a Stackelberg game approach, and describe a novel DR model for electricity trading between one utility company and multiple users, which is aimed at balancing supply and demand, as well as smoothing the aggregated load in the system. The interactions between the utility company (leader) and users (followers) are formulated into a 1-leader, N-follower Stackelberg game, where optimization problems are formed for each player to help select the optimal strategy. A pricing function is adopted for regulating real-time prices (RTP), which then act as a coordinator, inducing users to join the game. An iterative algorithm is proposed to derive the Stackelberg equilibrium, through which optimal power generation and power demands are determined for the utility company and users respectively. Numerical results indicate that the proposed method can efficiently reshape users’ demands, including flattening peak demands and filling the vacancy of valley demands, and significantly reduce the mismatch between supply and demand.

Keywords: Real-time price; Demand response; Load balancing; Smart grid; Stackelberg game (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (59)

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DOI: 10.1016/j.apenergy.2015.12.039

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