A distributed game theoretic approach to energy trading in the smart grid

Abstract

This paper propose a distributed game where energy is traded between multiple smart grid users. More precisely, a number of geographically distributed consumers may have a surplus of energy for sale while others need to buy energy to meet their local demands. Sellers make profit by selling their surplus of energy stored in storage devices such as electric vehicle batteries. Buyers can save on their energy bill by buying energy from their neighbors, instead of the grid, at a lower price, which also decreases the load on the grid. Under this proposed approach, buyers play a game by deciding how much energy they will buy from each seller in order to minimize their energy bill while taking into consideration energy transmission cost. The proposed approach is evaluated through a set of simulations, where the attained energy bill of buyers as well as the convergence rate are shown for different scenarios. To confirm the effectiveness of the proposed game, we compare the results to those of a centralized optimization model.