Multi-objective pricing game among interconnected smart microgrids

Future power grids are expected to be a combination of interconnected microgrids leveraging solar, wind, and plugin electrical vehicles (PEVs). Due to the intermittent nature of renewable energy sources, smart microgrids may not be able to consistently meet the demands of all the prosumers connected to them. Therefore, the necessity of power trading algorithms is becoming increasingly important. Recently, game theory has emerged as one of the analytical frameworks to deal with the aforementioned issues in the context of smart grids. In this paper, we develop a pricing mechanism for interconnected smart microgrids based on potential game theory. We develop a mathematical model and simulation engine to study the anticipated benefits of an open market, where multiple suppliers and multiple prosumers coexist. We demonstrate that our model captures the energy losses, real-time cost, and production to optimize the overall losses and total production costs.