Game-Theoretic Sectoral Demand Response Procurement in Multi-Energy Microgrid Planning

Abstract

Multi-energy community microgrids (MGs) have been recognized as key enablers for harnessing distributed demand-side flexibility resources, especially when integrating storage. However, the literature on demand response-integrated community energy system design and dispatch optimization has, thus far, failed to concurrently maximize the flexibility potential in several energy carriers, thereby neglecting the potentially significant improvement opportunities of the associated business cases. In response, this paper introduces a novel Nash bargaining-based cooperative game approach for the optimal aggregator-mediated demand response scheduling of multi-energy community MGs serving electricity and thermal loads, as well as hydrogen as a transportation fuel. More specifically, the proposed approach systematically and effectively characterizes how the players share the resulting surplus from demand-side management in an equitable manner under the assumption that the interests of the players - the MG operator, sectoral demand response aggregators, and small-scale end-users - are neither completely opposed nor completely coincident. The proposed approach is then integrated into a meta-heuristic-based long-term MG planning method. A case study for a community-based residential users' aggregation scheme in Aotearoa-New Zealand demonstrates the effectiveness of the method in reducing the total discounted system cost of a multi-energy MG by ~14% (equating to US$1.9m) and ~31% (US$5.4m) respectively compared to the cases where: (i) the actors' behaviors are characterized using non-cooperative game theory under self-interestedness assumptions; and (ii) no demand response programs are implemented.