Game-Based Pricing for Joint Carbon and Electricity Trading in Microgrids

To realize carbon emission reduction, restricting regional carbon emissions while meeting electricity usage is a critical but not trivial problem. In this paper, we propose a game-based pricing scheme for joint carbon emission rights (CER) and electricity trading between the electricity prosumers within a microgrid. For modeling and theoretical analysis, we first introduce the utility functions of electricity producers and consumers, which are determined by CER and electricity prices in a coupled way. Then, the multi-leader multi-follower (MLMF) Stackelberg game and non-cooperative game are employed to formulate the electricity and CER pricing and trading, respectively. The game equilibriums convince that optimal prices for both electricity and CER exist to satisfy electricity usage while meeting the carbon emission restriction. For implementation, the blockchain with smart contracts is developed to undertake the CER and electricity trading in a transparent and credible way. A prototype system based on Fabric blockchain verifies the feasibility of the proposed scheme, which demonstrated a five-fold increase in the economics and electricity generation utility of the microgrid and achieved a 2% reduction in carbon emissions compared to the baseline model.