A stackelberg game approach for heterogeneous energy market in integrated energy system

With the increasing demand of energy and the growing intensity of energy crisis, various smart energy systems are developed on the distribution level, such as integrated energy system (IES). In this article, a trading mechanism among various energy retailers and consumers is designed under the open market environment. The trading problem is formulated as a multi-leader and multi-follower Stackelberg game, which is built with the strategy set of energy bidding price and purchasing pattern. In particular, consumer's demand is described with the price elasticity property of demand, and non-cooperative competition behavior among retailers is analyzed mathematically. To implement the proposed game approach, a distributed algorithm is presented by combining particle swarm optimization (PSO) and interior point method (IPM). Finally, simulation results show that the proposed trading mechanism will contribute to the development of heterogeneous energy market and the overall profit of retailers in the traditional trading mechanism is 37.8% lower than the profit in the proposed mechanism.