Bidding strategy of distributed energy resources in the electricity retail market, based on game theory approach, considering uncertainties

Demand side management (DSM) is one of the key features of electricity networks of the future, as it is a promising way to control energy use in order to allocate more energy efficiency and stable power supplies. In addition, using DSM provides an opportunity to integrate large amount of renewable resources in the power system generation mix and promising solution for maintaining generation and demand balance in the presence of uncertainty in operation. As a result, it can reduce penalty cost due to imbalance between demand and production for the electricity market participants. This paper presents a general structure for an electricity retail market within Microgrids based on game theory concept. A combination of Nikaido-Isoda algorithm (based on non-cooperative game theory) and a relaxation algorithm (NIRA) is employed in this study (Called REM-NIRA algorithm). In the proposed approach, consumers aim to minimize market-clearing prices whilst producers aim to maximize profit through local operations and distributed generation management, energy storage resource, and responsive load demands in relation to the upstream network.