Prioritizing consumers in smart grid: Energy management using game theory

This paper explores an idea of demand-supply balance for smart grids in which consumers are expected to play a significant role. The main objective is to motivate the consumer, by maximizing their benefit both as a seller and a buyer, to trade their surplus energy with the grid so as to balance the demand at the peak hour. To that end, a Stackelberg game is proposed to capture the interactions between the grid and consumers, and it is shown analytically that optimal energy trading parameters that maximize customers´ utilities are obtained at the solution of the game. A novel distributed algorithm is proposed to reach the optimal solution of the game, and numerical examples are used to assess the properties and effectiveness of the proposed approach.