A Game Theoretic Approach for Demand Response Allocation among Strategic Prosumers in Regulated Distribution Utilities

Abstract

This paper studies an optimal allocation of demand response (DR) provisions among strategic photovoltaic (PV) prosumers, through third-party DR providers which operate within the territory of the regulated distribution utility. A game theoretic model, consisting of a sequential game coupled with a simultaneous game, is proposed to capture the competition and interaction among PV prosumers, the third-party DR providers, and the utility company. An iterative approach is proposed to solve for the Nash equilibrium of the game. With this game theoretic model, the DR provision quantities for strategic PV prosumers are optimally determined, considering the profit maximizations of the PV prosumers, the DR providers, and the utility company. Case studies on an IEEE test system verifies the proposed model and the solution approach.