Geodesy

Quantum mechanics

Scheme (mathematics)

Engineering

Environmental economics

Microeconomics

Stability (learning theory)

Energy (signal processing)

Economics

Power (physics)

Computer science

Mathematical optimization

Grid

Distributed computing

Geology

Business

Stackelberg competition

Demand response

Physics

Peer-to-peer

Mathematics

Electric power system

Nash equilibrium

Mathematical analysis

Geometry

Game theory

Finance

Electricity

Order (exchange)

Machine learning

Electrical engineering

IEEE Transactions on Smart Grid

This paper proposes a peer-to-peer (P2P) energy trading scheme that can help a centralized power system to reduce the total electricity demand of its customers at the peak hour. To do so, a cooperative Stackelberg game is formulated, in which the centralized power system acts as the leader that needs to decide on a price at the peak demand period to incentivize prosumers to not seek any energy from it. The prosumers, on the other hand, act as followers and respond to the leader's decision by forming suitable coalitions with neighboring prosumers in order to participate in P2P energy trading to meet their energy demand. The properties of the proposed Stackelberg game are studied. It is shown that the game has a unique and stable Stackelberg equilibrium, as a result of the stability of prosumers' coalitions. At the equilibrium, the leader chooses its strategy using a derived closed-form expression, while the prosumers choose their equilibrium coalition structure. An algorithm is proposed that enables the centralized power system and the prosumers to reach the equilibrium solution. Numerical case studies demonstrate the beneficial properties of the proposed scheme.

Grid Influenced Peer-to-Peer Energy Trading