IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v215y2023ics0960148123008650.html
   My bibliography  Save this article

A data-driven Stackelberg game approach applied to analysis of strategic bidding for distributed energy resource aggregator in electricity markets

Author

Listed:
  • Lei, Zhenxing
  • Liu, Mingbo
  • Shen, Zhijun
  • Lu, Wentian
  • Lu, Zhilin

Abstract

In the context of the participation of distributed energy resource (DER) aggregators in day-ahead energy and reserve markets, most of the existing analysis models of strategic bidding behavior of DER aggregators ignore the consideration of the safe operation of distribution systems. To this end, this paper builds a one-leader multi-follower Stackelberg game model considering the safety checking of distribution systems with the discrete features of capacitor banks and tap ratio of the substation transformer in the lower level. Mathematically, this model constitutes a bi-level mixed-integer nonlinear programming (BMINLP) problem. We convert the BMINLP model to a bi-level mixed-integer linear programming (BMILP) model based on KKT conditions, strong duality theorem, and big-M approach, which is still difficult to be solved directly. As a result, we propose a customized data-driven algorithm based on sampling without tuning hyper-parameters and an improved linear surrogate function method, to accurately fit the corresponding constraints of the lower-level model of BMILP problem, and then transform the BMILP problem into a single-level mixed-integer linear programming (MILP) problem to solve. The simulation of data-driven algorithm and comparison with the particle swarm optimization algorithm shows the high practicability of the bi-level Stackelberg game model and the effectiveness of the data-driven algorithm.

Suggested Citation

  • Lei, Zhenxing & Liu, Mingbo & Shen, Zhijun & Lu, Wentian & Lu, Zhilin, 2023. "A data-driven Stackelberg game approach applied to analysis of strategic bidding for distributed energy resource aggregator in electricity markets," Renewable Energy, Elsevier, vol. 215(C).
    • Handle: RePEc:eee:renene:v:215:y:2023:i:c:s0960148123008650
    DOI: 10.1016/j.renene.2023.118959
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148123008650
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2023.118959?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Chunyu & Wang, Qi & Wang, Jianhui & Korpås, Magnus & Pinson, Pierre & Østergaard, Jacob & Khodayar, Mohammad E., 2016. "Trading strategies for distribution company with stochastic distributed energy resources," Applied Energy, Elsevier, vol. 177(C), pages 625-635.
    2. Sheikhahmadi, P. & Bahramara, S. & Moshtagh, J. & Yazdani Damavandi, M., 2018. "A risk-based approach for modeling the strategic behavior of a distribution company in wholesale energy market," Applied Energy, Elsevier, vol. 214(C), pages 24-38.
    3. Chen, Houhe & Wang, Di & Zhang, Rufeng & Jiang, Tao & Li, Xue, 2022. "Optimal participation of ADN in energy and reserve markets considering TSO-DSO interface and DERs uncertainties," Applied Energy, Elsevier, vol. 308(C).
    4. Burcu Beykal & Styliani Avraamidou & Ioannis P. E. Pistikopoulos & Melis Onel & Efstratios N. Pistikopoulos, 2020. "DOMINO: Data-driven Optimization of bi-level Mixed-Integer NOnlinear Problems," Journal of Global Optimization, Springer, vol. 78(1), pages 1-36, September.
    5. Li, Songrui & Zhang, Lihui & Nie, Lei & Wang, Jianing, 2022. "Trading strategy and benefit optimization of load aggregators in integrated energy systems considering integrated demand response: A hierarchical Stackelberg game," Energy, Elsevier, vol. 249(C).
    6. Zhu, Ziqing & Wing Chan, Ka & Bu, Siqi & Zhou, Bin & Xia, Shiwei, 2021. "Real-Time interaction of active distribution network and virtual microgrids: Market paradigm and data-driven stakeholder behavior analysis," Applied Energy, Elsevier, vol. 297(C).
    7. Gržanić, M. & Capuder, T. & Zhang, N. & Huang, W., 2022. "Prosumers as active market participants: A systematic review of evolution of opportunities, models and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    8. Le Cadre, Hélène & Mezghani, Ilyès & Papavasiliou, Anthony, 2019. "A game-theoretic analysis of transmission-distribution system operator coordination," European Journal of Operational Research, Elsevier, vol. 274(1), pages 317-339.
    9. Nizami, M.S.H. & Hossain, M.J. & Amin, B.M. Ruhul & Fernandez, Edstan, 2020. "A residential energy management system with bi-level optimization-based bidding strategy for day-ahead bi-directional electricity trading," Applied Energy, Elsevier, vol. 261(C).
    10. Wang, Haiyang & Zhang, Chenghui & Li, Ke & Liu, Shuai & Li, Shuzhen & Wang, Yu, 2021. "Distributed coordinative transaction of a community integrated energy system based on a tri-level game model," Applied Energy, Elsevier, vol. 295(C).
    11. Hélène Le Cadre & Ilyès Mezghani & Anthony Papavasiliou, 2019. "A game-theoretic analysis of transmission-distribution system operator coordination," LIDAM Reprints CORE 2996, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    12. Dajun Yue & Jiyao Gao & Bo Zeng & Fengqi You, 2019. "A projection-based reformulation and decomposition algorithm for global optimization of a class of mixed integer bilevel linear programs," Journal of Global Optimization, Springer, vol. 73(1), pages 27-57, January.
    13. Li, Yang & Wang, Bin & Yang, Zhen & Li, Jiazheng & Chen, Chen, 2022. "Hierarchical stochastic scheduling of multi-community integrated energy systems in uncertain environments via Stackelberg game," Applied Energy, Elsevier, vol. 308(C).
    14. Xu, Guangyue & Schwarz, Peter & Yang, Hualiu, 2020. "Adjusting energy consumption structure to achieve China's CO2 emissions peak," Renewable and Sustainable Energy Reviews, Elsevier, vol. 122(C).
    15. Sun, Shitong & Kazemi-Razi, S. Mahdi & Kaigutha, Lisa G. & Marzband, Mousa & Nafisi, Hamed & Al-Sumaiti, Ameena Saad, 2022. "Day-ahead offering strategy in the market for concentrating solar power considering thermoelectric decoupling by a compressed air energy storage," Applied Energy, Elsevier, vol. 305(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vijay, Rohit & Mathuria, Parul, 2024. "Common TSO-DSO market framework with no upfront priority to utilize DER flexibility," Energy, Elsevier, vol. 299(C).
    2. Li, Longxi, 2021. "Coordination between smart distribution networks and multi-microgrids considering demand side management: A trilevel framework," Omega, Elsevier, vol. 102(C).
    3. Chen, Houhe & Wang, Di & Zhang, Rufeng & Jiang, Tao & Li, Xue, 2022. "Optimal participation of ADN in energy and reserve markets considering TSO-DSO interface and DERs uncertainties," Applied Energy, Elsevier, vol. 308(C).
    4. Han, Fengwu & Zeng, Jianfeng & Lin, Junjie & Zhao, Yunlong & Gao, Chong, 2023. "A stochastic hierarchical optimization and revenue allocation approach for multi-regional integrated energy systems based on cooperative games," Applied Energy, Elsevier, vol. 350(C).
    5. Zeynali, Saeed & Nasiri, Nima & Ravadanegh, Sajad Najafi & Marzband, Mousa, 2022. "A three-level framework for strategic participation of aggregated electric vehicle-owning households in local electricity and thermal energy markets," Applied Energy, Elsevier, vol. 324(C).
    6. Wang, Haibing & Zhao, Anjie & Khan, Muhammad Qasim & Sun, Weiqing, 2024. "Optimal operation of energy hub considering reward-punishment ladder carbon trading and electrothermal demand coupling," Energy, Elsevier, vol. 286(C).
    7. Shariat Torbaghan, Shahab & Madani, Mehdi & Sels, Peter & Virag, Ana & Le Cadre, Hélène & Kessels, Kris & Mou, Yuting, 2021. "Designing day-ahead multi-carrier markets for flexibility: Models and clearing algorithms," Applied Energy, Elsevier, vol. 285(C).
    8. Martin Palovic, 2022. "Coordination of power network operators as a game-theoretical problem," Bremen Energy Working Papers 0040, Bremen Energy Research.
    9. Yao, Wenliang & Wang, Chengfu & Yang, Ming & Wang, Kang & Dong, Xiaoming & Zhang, Zhenwei, 2023. "A tri-layer decision-making framework for IES considering the interaction of integrated demand response and multi-energy market clearing," Applied Energy, Elsevier, vol. 342(C).
    10. Zhao, Wei & Liao, Qi & Qiu, Rui & Liu, Chunying & Xu, Ning & Yu, Xiao & Liang, Yongtu, 2024. "Pipe sharing: A bilevel optimization model for the optimal capacity allocation of natural gas network," Applied Energy, Elsevier, vol. 359(C).
    11. Xiao, Xiangsheng & Wang, JianXiao & Hill, David J., 2022. "Impact of Large-scale concentrated solar power on energy and auxiliary markets," Applied Energy, Elsevier, vol. 318(C).
    12. Longxi Li, 2020. "Optimal Coordination Strategies for Load Service Entity and Community Energy Systems Based on Centralized and Decentralized Approaches," Energies, MDPI, vol. 13(12), pages 1-22, June.
    13. Attar, Mehdi & Repo, Sami & Mann, Pierre, 2022. "Congestion management market design- Approach for the Nordics and Central Europe," Applied Energy, Elsevier, vol. 313(C).
    14. Rafal Dzikowski, 2020. "DSO–TSO Coordination of Day-Ahead Operation Planning with the Use of Distributed Energy Resources," Energies, MDPI, vol. 13(14), pages 1-25, July.
    15. Wang, Yubin & Yang, Qiang & Zhou, Yue & Zheng, Yanchong, 2024. "A risk-averse day-ahead bidding strategy of transactive energy sharing microgrids with data-driven chance constraints," Applied Energy, Elsevier, vol. 353(PB).
    16. Le Cadre, Hélène & Bedo, Jean-Sébastien, 2020. "Consensus reaching with heterogeneous user preferences, private input and privacy-preservation output," Operations Research Perspectives, Elsevier, vol. 7(C).
    17. Wang, Yongli & Liu, Zhen & Wang, Jingyan & Du, Boxin & Qin, Yumeng & Liu, Xiaoli & Liu, Lin, 2023. "A Stackelberg game-based approach to transaction optimization for distributed integrated energy system," Energy, Elsevier, vol. 283(C).
    18. Javier Parra-Domínguez & Esteban Sánchez & Ángel Ordóñez, 2023. "The Prosumer: A Systematic Review of the New Paradigm in Energy and Sustainable Development," Sustainability, MDPI, vol. 15(13), pages 1-44, July.
    19. Anibal Sanjab & H'el`ene Le Cadre & Yuting Mou, 2021. "TSO-DSOs Stable Cost Allocation for the Joint Procurement of Flexibility: A Cooperative Game Approach," Papers 2111.12830, arXiv.org.
    20. Schittekatte, Tim & Meeus, Leonardo, 2020. "Flexibility markets: Q&A with project pioneers," Utilities Policy, Elsevier, vol. 63(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:215:y:2023:i:c:s0960148123008650. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.