Comparison Between Seller and Buyer Pricing Systems for Energy Trading in Microgrids

Abstract

In this paper, two systems for energy trading among energy prosumers are proposed: a buyer-pricing-system (BPS), in which buyers determine the price of energy and a seller-pricing-system (SPS) in which sellers determine the price of energy. In order to analyze the BPS, the competition among buyers in the BPS is formulated as a strategic form game named energy-competition-game among buyers (ECG-AB). It is shown that the Nash equilibrium of the ECG-AB exists and furthermore is unique. Both systems are formulated by Stackelberg duopoly game model, and it is shown that there exists a unique subgame perfect equilibrium, which implies that each system is stable. Now, in the SPS, it is shown that an equilibrium solution of the Stackelberg duopoly game model does not reduce social welfare. Thus, the analysis shows that the considered systems are stable and efficient. In order to corroborate the analysis, simulation is performed and numerical results validate the analysis; a full simulation code to simulate the proposed systems is available on GitHub.