Game-theoretic optimization of demand-side flexibility engagement considering the perspectives of different stakeholders and multiple flexibility services

Hong Tang and Shengwei Wang

Applied Energy, 2023, vol. 332, issue C, No S0306261922018074

Abstract: The building sector has great potential to provide multiple flexibility services contributing to a more efficient and reliable electricity network. However, such demand-side flexibility is still obstructed by limited market access and a sheer lack of business models. Lack of studies investigates building users’ trade-off between the profits from flexibility contribution and the satisfaction of load and indoor comfort. How to determine the attractive diversifying revenue streams for users’ contribution to multiple flexibility services remains relatively uninvestigated. Therefore, this paper develops a game-theoretic optimization scheme based on the intermediary aggregator to unlock the considerable flexibility potential of buildings. A bi-level optimization problem is formulated to determine the optimal transactional prices of multiple flexibility services offered by the agent and the flexibility capacities provided by buildings based on the Nash Equilibrium of the Stackelberg game. The game relation can effectively capture the interaction between building users and the aggregator agent and depict the trade-off between electricity bills and users’ satisfaction. The optimization results of the case study show that a win-win situation can be yielded under the proposed interactive scheme. The aggregator agent and building users can increase the profit by 37.4% and 5.6%-5.9%, respectively, and the total peak demand can be reduced by 6.3%. Meanwhile, setting proper discomfort cost coefficients and transactional price thresholds can effectively improve the negotiation of profit distribution between different stakeholders.

Keywords: Smart grid; Multiple services; Stackelberg game; Demand-side flexibility; Indoor comfort; Bi-level optimization (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.apenergy.2022.120550

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