IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v313y2024ics0360544224034935.html
   My bibliography  Save this article

Game-theoretic optimization strategy for maximizing profits to both end-users and suppliers in building rooftop PV-based microgrids

Author

Listed:
  • Luo, Jianing
  • Panchabikesan, Karthik
  • Lai, Kee-hung
  • Olawumi, Timothy O.
  • Mewomo, Modupe Cecilia
  • Liu, Zhengxuan

Abstract

Rooftop photovoltaic (PV) with battery storage offers a promising avenue for enhancing renewable energy integration in buildings. Creating microgrids with backup power from closely spaced solar buildings is widely recognized as an effective strategy. Nevertheless, a notable gap exists between the preferences and priorities of electricity consumers residing in these solar-powered buildings and the interests of microgrid investors. The electricity consumers focus on decreasing the levelized cost of energy, while the microgrid investors focuses on achieving high net profit. This study proposes a novel game theory-based microgrid optimal design approach for designing power generations of the microgrid system and PV installation with battery storage on the building roofs, considering the different requirements and interests of electricity consumers and microgrid investors. The design optimization is framed around the Nash Equilibrium of the Stackelberg game, incorporating a bi-level optimization cycle that addresses the conflict and cooperation of electricity consumers and microgrid investors. A win-win situation can be yielded using the developed optimal design approach compared to conventional optimal design approaches. The results demonstrate a significant improvement, with the microgrid power generation yielding a large net profit (up to 0.08 USD/kWh) and concurrently reducing the levelized cost of energy by approximately 14 %.

Suggested Citation

  • Luo, Jianing & Panchabikesan, Karthik & Lai, Kee-hung & Olawumi, Timothy O. & Mewomo, Modupe Cecilia & Liu, Zhengxuan, 2024. "Game-theoretic optimization strategy for maximizing profits to both end-users and suppliers in building rooftop PV-based microgrids," Energy, Elsevier, vol. 313(C).
    • Handle: RePEc:eee:energy:v:313:y:2024:i:c:s0360544224034935
    DOI: 10.1016/j.energy.2024.133715
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544224034935
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2024.133715?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David L. McCollum & Wenji Zhou & Christoph Bertram & Harmen-Sytze Boer & Valentina Bosetti & Sebastian Busch & Jacques Després & Laurent Drouet & Johannes Emmerling & Marianne Fay & Oliver Fricko & Sh, 2018. "Author Correction: Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals," Nature Energy, Nature, vol. 3(8), pages 699-699, August.
    2. Tang, Rui & Wang, Shengwei & Li, Hangxin, 2019. "Game theory based interactive demand side management responding to dynamic pricing in price-based demand response of smart grids," Applied Energy, Elsevier, vol. 250(C), pages 118-130.
    3. Yang, Yuqing & Bremner, Stephen & Menictas, Chris & Kay, Merlinde, 2018. "Battery energy storage system size determination in renewable energy systems: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 109-125.
    4. Li, Bei & Roche, Robin & Miraoui, Abdellatif, 2017. "Microgrid sizing with combined evolutionary algorithm and MILP unit commitment," Applied Energy, Elsevier, vol. 188(C), pages 547-562.
    5. Jung, Jaesung & Villaran, Michael, 2017. "Optimal planning and design of hybrid renewable energy systems for microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 180-191.
    6. van den Broek, Machteld & Veenendaal, Paul & Koutstaal, Paul & Turkenburg, Wim & Faaij, André, 2011. "Impact of international climate policies on CO2 capture and storage deployment: Illustrated in the Dutch energy system," Energy Policy, Elsevier, vol. 39(4), pages 2000-2019, April.
    7. Zhang, Guodao & Ge, Yisu & Pan, Xiaotian & Zheng, Yun & Yang, Yanhong, 2023. "Hybrid robust-stochastic multi-objective optimization of combined cooling, heating, hydrogen and power-based microgrids," Energy, Elsevier, vol. 274(C).
    8. Tobias S. Schmidt & Sebastian Sewerin, 2017. "Technology as a driver of climate and energy politics," Nature Energy, Nature, vol. 2(6), pages 1-3, June.
    9. Kusakana, Kanzumba, 2020. "Optimal energy management of a grid-connected dual-tracking photovoltaic system with battery storage: Case of a microbrewery under demand response," Energy, Elsevier, vol. 212(C).
    10. Daud, Abdel-Karim & Ismail, Mahmoud S., 2012. "Design of isolated hybrid systems minimizing costs and pollutant emissions," Renewable Energy, Elsevier, vol. 44(C), pages 215-224.
    11. Lou, Juwei & Cao, Hua & Meng, Xin & Wang, Yaxiong & Wang, Jiangfeng & Chen, Liangqi & Sun, Lu & Wang, Mengxuan, 2024. "Power load analysis and configuration optimization of solar thermal-PV hybrid microgrid based on building," Energy, Elsevier, vol. 289(C).
    12. Parizad, Ali & Hatziadoniu, Konstadinos, 2020. "Security/stability-based Pareto optimal solution for distribution networks planning implementing NSGAII/FDMT," Energy, Elsevier, vol. 192(C).
    13. David L. McCollum & Wenji Zhou & Christoph Bertram & Harmen-Sytze Boer & Valentina Bosetti & Sebastian Busch & Jacques Després & Laurent Drouet & Johannes Emmerling & Marianne Fay & Oliver Fricko & Sh, 2018. "Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals," Nature Energy, Nature, vol. 3(7), pages 589-599, July.
    14. Kuramochi, Takeshi & Ramírez, Andrea & Turkenburg, Wim & Faaij, André, 2013. "Techno-economic prospects for CO2 capture from distributed energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 328-347.
    15. Jia, Zhijie & Lin, Boqiang & Wen, Shiyan, 2022. "Electricity market Reform: The perspective of price regulation and carbon neutrality," Applied Energy, Elsevier, vol. 328(C).
    16. Elkadeem, Mohamed R. & Kotb, Kotb M. & Abido, Mohamed A. & Hasanien, Hany M. & Atiya, Eman G. & Almakhles, Dhafer & Elmorshedy, Mahmoud F., 2024. "Techno-enviro-socio-economic design and finite set model predictive current control of a grid-connected large-scale hybrid solar/wind energy system: A case study of Sokhna Industrial Zone, Egypt," Energy, Elsevier, vol. 289(C).
    17. Zhou, Yuekuan, 2022. "Incentivising multi-stakeholders’ proactivity and market vitality for spatiotemporal microgrids in Guangzhou-Shenzhen-Hong Kong Bay Area," Applied Energy, Elsevier, vol. 328(C).
    18. Alizadeh Bidgoli, Mohsen & Ahmadian, Ali, 2022. "Multi-stage optimal scheduling of multi-microgrids using deep-learning artificial neural network and cooperative game approach," Energy, Elsevier, vol. 239(PB).
    19. Swaminathan, Siddharth & Pavlak, Gregory S. & Freihaut, James, 2020. "Sizing and dispatch of an islanded microgrid with energy flexible buildings," Applied Energy, Elsevier, vol. 276(C).
    20. Luo, Jianing & Li, Hangxin & Wang, Shengwei, 2022. "A quantitative reliability assessment and risk quantification method for microgrids considering supply and demand uncertainties," Applied Energy, Elsevier, vol. 328(C).
    21. Zheng, C.Y. & Wu, J.Y. & Zhai, X.Q. & Wang, R.Z., 2016. "Impacts of feed-in tariff policies on design and performance of CCHP system in different climate zones," Applied Energy, Elsevier, vol. 175(C), pages 168-179.
    22. Brouwer, Anne Sjoerd & van den Broek, Machteld & Seebregts, Ad & Faaij, André, 2015. "Operational flexibility and economics of power plants in future low-carbon power systems," Applied Energy, Elsevier, vol. 156(C), pages 107-128.
    23. Li, Hangxin & Wang, Shengwei, 2019. "Coordinated optimal design of zero/low energy buildings and their energy systems based on multi-stage design optimization," Energy, Elsevier, vol. 189(C).
    24. Venkateswari, R. & Sreejith, S., 2019. "Factors influencing the efficiency of photovoltaic system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 376-394.
    25. Lin, Jin & Dong, Jun & Dou, Xihao & Liu, Yao & Yang, Peiwen & Ma, Tongtao, 2022. "Psychological insights for incentive-based demand response incorporating battery energy storage systems: A two-loop Stackelberg game approach," Energy, Elsevier, vol. 239(PC).
    26. Luo, Jianing & Yuan, Yanping & Joybari, Mahmood Mastani & Cao, Xiaoling, 2024. "Development of a prediction-based scheduling control strategy with V2B mode for PV-building-EV integrated systems," Renewable Energy, Elsevier, vol. 224(C).
    27. Tomin, Nikita & Shakirov, Vladislav & Kozlov, Aleksander & Sidorov, Denis & Kurbatsky, Victor & Rehtanz, Christian & Lora, Electo E.S., 2022. "Design and optimal energy management of community microgrids with flexible renewable energy sources," Renewable Energy, Elsevier, vol. 183(C), pages 903-921.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Bei & Li, Jiangchen, 2021. "Probabilistic sizing of a low-carbon emission power system considering HVDC transmission and microgrid clusters," Applied Energy, Elsevier, vol. 304(C).
    2. Gregor Semieniuk & Emanuele Campiglio & Jean‐Francois Mercure & Ulrich Volz & Neil R. Edwards, 2021. "Low‐carbon transition risks for finance," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(1), January.
    3. Luo, Jianing & Yuan, Yanping & Joybari, Mahmood Mastani & Cao, Xiaoling, 2024. "Development of a prediction-based scheduling control strategy with V2B mode for PV-building-EV integrated systems," Renewable Energy, Elsevier, vol. 224(C).
    4. Soheil Mohseni & Alan C. Brent, 2022. "A Metaheuristic-Based Micro-Grid Sizing Model with Integrated Arbitrage-Aware Multi-Day Battery Dispatching," Sustainability, MDPI, vol. 14(19), pages 1-24, October.
    5. Gumber, Anurag & Zana, Riccardo & Steffen, Bjarne, 2024. "A global analysis of renewable energy project commissioning timelines," Applied Energy, Elsevier, vol. 358(C).
    6. Joëlle Noailly & Roger Smeets, 2022. "Financing Energy Innovation: Internal Finance and the Direction of Technical Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(1), pages 145-169, September.
    7. Wu, Qingyang & Wang, Yanying, 2022. "How does carbon emission price stimulate enterprises' total factor productivity? Insights from China's emission trading scheme pilots," Energy Economics, Elsevier, vol. 109(C).
    8. Marco Due~nas & Antoine Mandel, 2024. "Are EU low-carbon structural funds efficient in reducing emissions?," Papers 2408.01782, arXiv.org.
    9. Thomas Baldauf & Patrick Jochem, 2024. "Project finance or corporate finance for renewable energy? an agent-based insight," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 19(4), pages 759-805, October.
    10. Yu, Bolin & Fang, Debin & Xiao, Kun & Pan, Yuling, 2023. "Drivers of renewable energy penetration and its role in power sector's deep decarbonization towards carbon peak," Renewable and Sustainable Energy Reviews, Elsevier, vol. 178(C).
    11. Tommy Chrimes & Bram Gootjes & M. Ayhan Kose & Collette Wheeler, 2024. "The Great Reversal," World Bank Publications - Books, The World Bank Group, number 41403, April.
    12. Perdana, Sigit & Vielle, Marc, 2022. "Making the EU Carbon Border Adjustment Mechanism acceptable and climate friendly for least developed countries," Energy Policy, Elsevier, vol. 170(C).
    13. Qian Zhang & Christopher Kennedy & Tao Wang & Wendong Wei & Jiashuo Li & Lei Shi, 2020. "Transforming the coal and steel nexus for China's eco‐civilization: Interplay between rail and energy infrastructure," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1352-1363, December.
    14. Zohra Dradra & Chokri Abdennadher, 2023. "Modeling the effects of renewable energy on sustainable development: evidence from simultaneous equations models," Economic Change and Restructuring, Springer, vol. 56(4), pages 2111-2128, August.
    15. Dafermos, Yannis & Nikolaidi, Maria, 2021. "How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis," Journal of Financial Stability, Elsevier, vol. 54(C).
    16. Laura Cavalli & Mia Alibegovic & Edward Cruickshank & Luca Farnia & Ilenia G. Romani, 2023. "The impact of EU Structural Funds on the national sustainable development strategy: a methodological application," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 10(1), pages 52-69, December.
    17. Naoyuki Yoshino & Tim Schloesser & Farhad Taghizadeh‐Hesary, 2021. "Social funding of green financing: An application of distributed ledger technologies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6060-6073, October.
    18. Gong, Yu & Liu, Pan & Ming, Bo & Li, Dingfang, 2021. "Identifying the effect of forecast uncertainties on hybrid power system operation: A case study of Longyangxia hydro–photovoltaic plant in China," Renewable Energy, Elsevier, vol. 178(C), pages 1303-1321.
    19. Zhang, Mingming & Song, Wenwen & Liu, Liyun & Zhou, Dequn, 2024. "Optimal investment portfolio strategy for carbon neutrality of power enterprises," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PA).
    20. Fei Guo & Bas J. Ruijven & Behnam Zakeri & Shining Zhang & Xing Chen & Changyi Liu & Fang Yang & Volker Krey & Keywan Riahi & Han Huang & Yuanbing Zhou, 2022. "Implications of intercontinental renewable electricity trade for energy systems and emissions," Nature Energy, Nature, vol. 7(12), pages 1144-1156, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:313:y:2024:i:c:s0360544224034935. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.