A Game Theoretic Approach for Distributed Electricity Providers in Deregulated Power Market

With the integration of distributed energy resources (DER), there are multiple players in the electrical power market. Existing regulated electricity market structure may no longer be feasible under such a competitive power market. In this paper, we propose a new game-theoretic framework to study the optimization and decision making of multi-players in the distributed power system. The proposed game theoretic special concept-rational reaction set (RRS) is capable to model the game of the distributed energy providers and the large residential consumers. Meanwhile, the residential consumers are able to participate in the retail electricity market to control the market price. A set of mathematical models of the market participants is formulated with a number of local and global constraints. Case studies are conducted to validate the system framework using the proposed game theoretic method. The simulation results show the effectiveness and the accuracy of the proposed strategic framework for obtaining the optimum profits for players participating in this market.