A multi‐layer–multi‐player game model in electricity market

Here, a novel tri‐level energy market model aimed at addressing the challenges posed by demand side management (DSM) in the electricity distribution company (EDC) is introduced. DSM has emerged as a new strategy employed by EDCs to manage and control electricity demand by encouraging end‐users to modify their electricity consumption patterns. This is achieved through the participation of demand response (DR) aggregators, which play a crucial role in assisting end‐users with strategies and technologies to reduce their electricity consumption during peak hours. The proposed tri‐level energy market model consists of four distinct players: EDC, microgrids, aggregators, customers. The interactions between these four actors are modelled within a tri‐level game framework, where the EDC and aggregators act as leaders, and the micro‐grids and customers are followers. This multi‐level and multi‐player game structure allows for a more realistic representation of the complexities involved in DSM programs within the energy market. To demonstrate the effectiveness of the proposed model, a real case study is utilized, showing that the new model better resembles real‐life market conditions. The results illustrate how the tri‐level energy market model can significantly reduce demand fluctuations during peak hours, leading to improved efficiency and effectiveness within DSM programs.