Prosumers in local energy market based on non-cooperative game theory

Abstract

The disruptive innovation of renewable energy generation affects energy consumers' ability to self-generating electricity in their area. The inequality of surplus and demanded energy in the neighborhood area takes place in a local energy market. Regarding the market model, an aggregated model is considered, and the action between participants is set as non-cooperative. The request from market participants to the market operator is to maximize the profit as much as possible. To handle the critical feature is on the market clearing algorithm. The paper has selected the Nikaido-Isoda function and Relaxation Algorithm as solving tool. Furthermore, the function of the seller's revenue and buyer's cost saving, and market clearing price are added to determine the maximum profit. To present the market clearing process, the case study containing five prosumers is implemented. The discussion is on the difference between the local price and the retail price, and the allocated energy quantity according to prosumer bidding strategy.