Dynamic two-layer game for striking the balance of interest in multi-agent electricity market considering bilateral contracts and reward-punishment mechanism

• DOI: 10.1016/j.scs.2021.103488
• Publication Date: 2021-10-25T19:02:44Z
• Authors: L.L. Wang; P.H. Jiao; J.J. Chen; Y.L. Zhao; Y.L. Wang
• Keywords: Punishment (psychology)

Abstract To strike the balance of interest in multi-agent electricity market, this paper proposes a dynamic two-layer game in wholesale and retail market environment. First, at the higher layer, a bilateral contract-based master-slave game of wholesale market is developed to investigate the relationship between generators and suppliers. While at the lower layer, a nonlinear reward and punishment mechanism is presented for suppliers to guide users’ electricity consumption. Besides, we take the evolutionary game to model the dynamic selection process of users. Further, this paper proves the existence of Nash equilibrium in multi-agent electricity market and then establishes a distributed algorithm to reach the equilibrium solution. The effectiveness of the dynamic two-layer game strategy proposed in this paper is verified by simulation results, which demonstrates the strategy is conducive to the establishment of a friendly electricity market. Bilateral contracts, and the nonlinear dynamic reward and punishment mechanism can achieve the balance of power supply and demand in the market and realize the balance of interest in multi-agent market. The distributed algorithm performs a fast convergence speed and scalability.