A Stackelberg Game Theory Based Demand Response Algorithm for Domestic Consumers

Abstract

A stackelberg game algorithm is proposed to optimize real time demand response equilibrium between consumers and utilities with the integration of renewable energy sources. Stackelberg game is played between one leader and N followers to provide interaction between utility and consumers in the presence of energy management center. The objective of consumers is to minimize their energy tariffs by scheduling their appliances. Appliances are categorized as non-shiftable, shiftable and curtailable appliances based on their applications. The objective of the utility is to maximize its profit by managing peak to average energy consumption ratio, penetration of renewable energy sources as a primary source and during peak hours, integrate electric vehicles as a backup. The existence of a unique stackelberg equilibrium that provides an optimal energy consumption scheme to each appliance at the consumer end was demonstrated. The simulation results showed the optimal real time demand response using stackelberg game algorithm is effective for achieving the optimal load control.