An Incentive-Compatible Energy Trading Framework for Neighborhood Area Networks With Shared Energy Storage

Abstract

Here, a novel energy trading system is proposed for demand-side management of a neighborhood area network (NAN) consisting of a shared energy storage (SES) provider, users with non-dispatchable energy generation, and an electricity retailer. In a leader-follower Stackelberg game, the SES provider first maximizes their revenue by setting a price signal and trading energy with the grid. Then, by following the SES provider's actions, the retailer minimizes social cost for the users, i.e., the sum of the total users' cost when they interact with the SES and the total cost for supplying grid energy to the users. A pricing strategy, which incorporates mechanism design, is proposed to make the system incentive-compatible by rewarding users who disclose true energy usage information. A unique Stackelberg equilibrium is achieved where the SES provider's revenue is maximized and the user-level social cost is minimized, which also rewards the retailer. A case study with realistic energy demand and generation data demonstrates 28%-45% peak demand reduction of the NAN, depending on the number of participating users, compared to a system without SES. Simulation results confirm that the retailer can also benefit financially, in addition to the SES provider and the users.

A Robust Scalable Demand-Side Management Based on Diffusion-ADMM Strategy for Smart Grid

“…9 (a), case Cheat-Failure (estimation), we can see that the customers' peak demand coincides with the No DSM case. This is because the customers do not know that the price is the highest at theses slots, and consume more power to increase their utility through maximizing function (9).…”

“…This can create sub-peaks and high load fluctuations. In the mentioned works (such as, [9], [10], [15], [30], [31]) these peak loads and high demand fluctuations can overload all the distribution infrastructures and take down the power system. To prevent such damages and provide a valid DSM approach we provide a dynamic pricing policy.…”

“…Moreover, the integration of plug-in electric vehicles (PEVs) [8], energy storage systems (ESSs) [9], and renewable energy sources (RESs) [10] in the DSM programs plays a significant role in balancing the generation of electricity and its realtime demand. Different from the traditional computation in power systems, which customizes the information and communication technology (ICT) resources for mapping the applications separately, the DSM especially asks for scalability and economic efficiency, because there are increasing number of stakeholders participating in the computation process.…”

“…Result comparison between three DSM scenarios; a) Aggregated customers' payment, b) aggregate customers' utility level(9), and c) The utility company's profit.…”

A Two-Stage Game-Theoretic Method for Residential PV Panels Planning Considering Energy Sharing Mechanism

“…In Ref. [4], a novel energy sharing strategy is presented for demand-side management in a neighborhood area network (NAN), which is comprised of energy providers, users, and an electricity retailer. Ref.…”