Energy Trading and Pricing in Microgrids with Uncertain Energy Supply: A Three-Stage Hierarchical Game Approach

Abstract

This paper studies an energy trading and pricing problem for microgrids with uncertain energy supply. The energy provider with the renewable energy (RE) generation (wind power) determines the energy purchase from the electricity markets and the pricing strategy for consumers to maximize its profit, and then the consumers determine their energy demands to maximize their payoffs. The hierarchical game is established between the energy provider and the consumers. The energy provider is the leader and the consumers are the followers in the hierarchical game. We consider two types of consumers according to their response to the price, i.e., the price-taking consumers and the price-anticipating consumers. We derive the equilibrium point of the hierarchical game through the backward induction method. Comparing the two types of consumers, we study the influence of the types of consumers on the equilibrium point. In particular, the uncertainty of the energy supply from the energy provider is considered. Simulation results show that the energy provider can obtain more profit using the proposed decision-making scheme.

Online Pricing via Stackelberg and Incentive Games in a Micro-Grid

“…In [13] the Stackelberg approach is used in conjunction with evolutionary algorithms for online pricing schemes. The existence of equilibrium points using other kinds of games including the Stackelberg game is demonstrated in [14] and [15]. The main difference of our current study to the papers above is our novel inclusion of the incentive strategy when obtaining the price.…”

Distributed Energy Resources Management

“…This paper provides a summary of the Energies Special Issue covering the published articles [1][2][3][4][5][6][7][8][9][10][11][12][13], which address several topics related to distributed energy resources management. Table 1 identifies the most relevant topics in each publication; most of them cover three or more topics.…”

“…Another perspective on energy trading and pricing is provided in [3], which formulates a hierarchical game between the energy provider as the leader and consumers as the followers. The uncertainty of the energy supply is also considered.…”

Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic

“…The study complements the existing stream of scientific literature aimed at evaluating business risks in immature markets [22][23][24], liberalization of energy markets [25][26][27] and energy trading [28][29][30].…”