Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators

Yang Chen; Mohammed Olama; Tanmay Rajpurohit; Jin Dong; Yaosuo Xue

doi:10.1109/ICSGSC.2019.00005

Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators

Yang Chen, Mohammed Olama, Tanmay Rajpurohit, Jin Dong, Yaosuo Xue

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

3 Scopus citations

Abstract

Transactive energy has emerged and gained more and more attention in recent years. Electricity pricing strategies play a critical role in influencing and shaping the customers' energy load profile. In this paper, we investigate the electricity pricing strategy between a distribution system operator (DSO) and load aggregators (LAs) by adopting a bilevel Stackelberg game approach. With the purpose of maximizing its own operating revenue as well as better serving its customers, the upper level DSO will determine electricity prices while considering how lower level LAs will respond to it. Peak-to-average ratio of the total demand could be limited by a preferred value, and peak load is penalized at the upper optimization level. Numerical results demonstrate the effectiveness of the proposed game approach in leveraging flexible demand potential to benefit both DSO and LAs.

Original language	English
Title of host publication	Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019
Publisher	Institute of Electrical and Electronics Engineers Inc.
Pages	176-181
Number of pages	6
ISBN (Electronic)	9781728138480
DOIs	https://doi.org/10.1109/ICSGSC.2019.00005
State	Published - Jun 2019
Event	3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019 - Berkeley, United States Duration: Jun 25 2019 → Jun 28 2019

Publication series

Name	Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019

Conference

Conference	3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019
Country/Territory	United States
City	Berkeley
Period	06/25/19 → 06/28/19

Funding

ACKNOWLEDGMENT This material is based upon work supported by the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. This manuscript has been authored by UT-Battelle, LLC under Contract No DE-AC05-00OR22725 with the U.S. Department of Energy. The United States Government retains and the publisher, by accepting the article for publication, acknowledges that the United States Government retains a non-exclusive, paid-up, irrevocable, world-wide license to publish or reproduce the published form of this manuscript, or allow others to do so, for United States Government purposes. The Department of Energy will provide public access to these results of federally sponsored research in accordance with the DOE Public Access Plan (http://energy.gov/downloads/doe-public-access-plan).

Keywords

Nash equilibrium
bilevel optimization
demand response
distribution system operator
load aggregator
smart grid
stackelberg game
transactive energy

Access to Document

10.1109/ICSGSC.2019.00005

Cite this

Chen, Y., Olama, M., Rajpurohit, T., Dong, J., & Xue, Y. (2019). Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators. In Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019 (pp. 176-181). Article 8906628 (Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/ICSGSC.2019.00005

Chen, Yang ; Olama, Mohammed ; Rajpurohit, Tanmay et al. / Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators. Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019. Institute of Electrical and Electronics Engineers Inc., 2019. pp. 176-181 (Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019).

@inproceedings{64f4dfd7fa3041439b65a5d4ee482e1c,

title = "Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators",

abstract = "Transactive energy has emerged and gained more and more attention in recent years. Electricity pricing strategies play a critical role in influencing and shaping the customers' energy load profile. In this paper, we investigate the electricity pricing strategy between a distribution system operator (DSO) and load aggregators (LAs) by adopting a bilevel Stackelberg game approach. With the purpose of maximizing its own operating revenue as well as better serving its customers, the upper level DSO will determine electricity prices while considering how lower level LAs will respond to it. Peak-to-average ratio of the total demand could be limited by a preferred value, and peak load is penalized at the upper optimization level. Numerical results demonstrate the effectiveness of the proposed game approach in leveraging flexible demand potential to benefit both DSO and LAs.",

keywords = "Nash equilibrium, bilevel optimization, demand response, distribution system operator, load aggregator, smart grid, stackelberg game, transactive energy",

author = "Yang Chen and Mohammed Olama and Tanmay Rajpurohit and Jin Dong and Yaosuo Xue",

note = "Publisher Copyright: {\textcopyright} 2019 IEEE.; 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019 ; Conference date: 25-06-2019 Through 28-06-2019",

year = "2019",

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doi = "10.1109/ICSGSC.2019.00005",

language = "English",

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Chen, Y , Olama, M, Rajpurohit, T, Dong, J & Xue, Y 2019, Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators. in Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019., 8906628, Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019, Institute of Electrical and Electronics Engineers Inc., pp. 176-181, 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019, Berkeley, United States, 06/25/19. https://doi.org/10.1109/ICSGSC.2019.00005

Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators. / Chen, Yang ; Olama, Mohammed; Rajpurohit, Tanmay et al.
Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019. Institute of Electrical and Electronics Engineers Inc., 2019. p. 176-181 8906628 (Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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AU - Chen, Yang

AU - Olama, Mohammed

AU - Rajpurohit, Tanmay

AU - Dong, Jin

AU - Xue, Yaosuo

PY - 2019/6

Y1 - 2019/6

N2 - Transactive energy has emerged and gained more and more attention in recent years. Electricity pricing strategies play a critical role in influencing and shaping the customers' energy load profile. In this paper, we investigate the electricity pricing strategy between a distribution system operator (DSO) and load aggregators (LAs) by adopting a bilevel Stackelberg game approach. With the purpose of maximizing its own operating revenue as well as better serving its customers, the upper level DSO will determine electricity prices while considering how lower level LAs will respond to it. Peak-to-average ratio of the total demand could be limited by a preferred value, and peak load is penalized at the upper optimization level. Numerical results demonstrate the effectiveness of the proposed game approach in leveraging flexible demand potential to benefit both DSO and LAs.

AB - Transactive energy has emerged and gained more and more attention in recent years. Electricity pricing strategies play a critical role in influencing and shaping the customers' energy load profile. In this paper, we investigate the electricity pricing strategy between a distribution system operator (DSO) and load aggregators (LAs) by adopting a bilevel Stackelberg game approach. With the purpose of maximizing its own operating revenue as well as better serving its customers, the upper level DSO will determine electricity prices while considering how lower level LAs will respond to it. Peak-to-average ratio of the total demand could be limited by a preferred value, and peak load is penalized at the upper optimization level. Numerical results demonstrate the effectiveness of the proposed game approach in leveraging flexible demand potential to benefit both DSO and LAs.

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KW - load aggregator

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Chen Y , Olama M, Rajpurohit T, Dong J , Xue Y. Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators. In Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019. Institute of Electrical and Electronics Engineers Inc. 2019. p. 176-181. 8906628. (Proceedings - 2019 3rd International Conference on Smart Grid and Smart Cities, ICSGSC 2019). doi: 10.1109/ICSGSC.2019.00005

Game-Theoretic Approach for Electricity Pricing between Distribution System Operator and Load Aggregators

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