A Game-Theoretic Approach to Model Interruptible Loads: Application to Micro-Grid Planning

Abstract

This paper proposes a novel modeling approach for the efficient integration of demand response (DR) resources into the equipment capacity-planning problem of micro-grids based on Game Theory. The main advantage of this approach is that it determines the DR events based on the day-ahead system state estimates (in contrast to the conventional exogenetic demand-side management approaches), whilst protecting the customers’ welfare. A battery-less, 100%-renewable, gridindependent micro-grid is conceptualized, and the town Ohakune, New Zealand is used as a test-case to evaluate the effectiveness of the proposed modeling framework. The numerical simulation results indicate that the proposed approach achieves substantial (12.59%) savings in the life-cycle cost of the target system, as compared to the case where a time-of-use DR is implemented.