A Stackelberg-Cournot model to harmonize participants' interests in a smart grid

Abstract

A “smart grid” refers to an advanced and modernized electrical grid system that incorporates various digital technologies, communication networks, and automation. In a smart grid, each subscriber’s energy consumption is monitored and updated by their smart meter, and cost-effective energy consumption scheduling is determined by two-way communication with other participants. In general, the interests among participants are naturally conflicted, and therefore the game-theoretic approach is frequently used to solve the problem. However, most previous studies focused on the game between a service provider and subscribers or game among service providers or subscribers. In this study, we propose an extended model consisting of two sub-games: 1) the Stackelberg game between a service provider (a leader) and subscribers (followers), and 2) the Cournot game among subscribers. Our model conducts an innovative energy consumption scheduling (ECS), especially harmonizing all participants’ aspects. It draws a unique Nash Equilibrium and achieves a more balanced and cost-effective demand management in the smart grid. Compared to the non-scheduling, our model reduces the subscriber’s cost and its standard deviation, on average, 20.5 % and 12.7 %, respectively. Also, the peak-to-average ratio (PAR) of energy consumption, the ratio between the highest energy consumption and the average energy consumption within a certain time frame, is decreased, on average, 24.3 %.