A Stackelberg game-based approach to load aggregator bidding strategies in electricity spot markets

Abstract

Load aggregators (LA) can aggregate the users with adjustable load capacity such as shared energy storage into a scaled resource in a package, and solve the problem of insufficient demand-side management by participating in the competition of electricity spot market. It is gradually becoming an emerging way to mobilize adjustable loads and improve load demand response capability. But it takes a set of economical and reliable bidding strategies to guide LA's participation in the spot market. This paper first describes the framework of the LA and the functions of the stakeholders in the system, as well as the trading mechanisms for their participation in the spot market, proposing a two-stage determination model of pricing and quantification; Secondly, a Stackelberg game model is developed, combining the operational constraints of different players, with the trading center as the leader and the LA and generators as the followers; Finally, four scenarios are designed to verify the validity of the model, and the results show that the proposed LA trading strategy reduces the purchasing cost by 16.53 % and increases the revenue by 12.66 %. The introduction of the Stackelberg game model ensures the sustainability of the strategy and provides an innovative idea for the trading strategy of customer-side in the spot market.