Distributed energy management in smart grid with dominated electricity provider and multiple microgrids

In this paper, we consider the energy management issues in smart grid with a dominated electricity provider, i.e., the utility company, and multiple microgrids (MGs) and customers. The utility company has much lower electricity generation cost, higher generation capacity, and first-mover advantage compared to MGs. On the other hand, MGs which are based on renewable energy sources have lower pollutant emission cost and higher customer preference. The interactions and interconnections among the utility company, MGs, and customers are taken into consideration. We model the energy management problem as a three-stage Stackelberg game, in which the utility company is the game leader, and MGs and customers are game followers. The backward induction method is used to analyze the proposed game and closed-form expressions are derived. Simulation results show the effectiveness of the proposed algorithm and the relationships among system parameters.