Mean-Field Stackelberg Game for Mitigating the Strategic Bidding of Energy Consumers in Congested Distribution Networks

Abstract

The sudden proliferation of Electric Vehicles (EVs), batteries and photovoltaic cells in power networks can lead to congested distribution networks. A substitute for upgrading network capacity is a redispatch market that enables the Distribution System Operators (DSOs) to mitigate congested networks by requesting the energy consumers to modify their consumption schedules. However, energy consumers are able to strategically modify their day-ahead market bids in anticipation of the redispatch market outcomes. This behaviour, which is known as increase-decrease gaming, can exacerbate congestion and give arbitrage opportunities to the energy consumers for gaining windfall profits from the DSO. In this paper, we propose an algorithm based on mean-field Stackelberg game to mitigate the increase-decrease game for large populations of energy consumers. In this game, the energy consumers (followers) maximize their individual welfare on the day-ahead market with anticipation of the redispatch market outcomes while the leader maximizes the social welfare of all agents and minimizes the costs of DSO on the redispatch market. We show the convergence of this algorithm to the mean-field leader-follower εN-Nash equilibrium.