A Coalitional Game for Demand-Side Management in a Low-Voltage Resistive Micro-Grid with Multiple Electricity Retailers

An existing challenge in power systems is the implementation of optimal demand management through dynamic pricing. This paper encompasses the design, analysis and implementation of a novel on-line pricing scheme based on coalitional game theory. The setting consists of a network with multiple energy retailers competing to attract consumers by announcing a price in a hierarchical leader-follower structure. The process of coalition formation under such a pricing scheme can be viewed as a game for which we show that a Stackelberg equilibrium exists, given a price, consumers will respond by conforming to a reciprocal power consumption quantity. We propose a coalition formation algorithm and perform a game-theoretic stability analysis on the resulting coalitions. We integrate the pricing setting with a resistive micro-grid dynamic model. In this context we analyse the behaviour of the integrated system, bridging the gap between market and physical layers of the problem. Simulations provide a comparison of profits generated by the proposed scheme against a more traditional single retailer scheme, while simultaneously showing convergence towards a steady-state equilibrium. Additionally, we shed light into the system's physical response when subject to our proposed pricing scheme.