International Journal of Electrical and

Electronics Engineering Research (IJEEER)

ISSN(P): 2250-155X; ISSN(E): 2278-943X
Vol. 6, Issue 4, Aug 2016, 75-86
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A SELF-HEALING MICROGRID SOCIAL NETWORK WITH DISTRIBUTED

ENERGY TRADING MECHANISM
YOUBIAO HE1 & JIN WEI2
Department of Electrical and Computer Engineering, The University of Akron, USA
1. ABSTRACT
The energy trading inmicrogrid network (MGN) is very different from that in the traditional electricity energy
market. In this paper, we propose an energy trading mechanism using game theoretic method by considering the
non-stability of renewable energy sources (RES) and social network, by which individuals decision-making will be
influenced. We consider multiple microgrids (MGs) which are connected with each other by information communication
infrastructures and power lines. Some of the MGs, called buyers, have energy request and some, called seller, have
surplus energy to sell. We design a multileadermultifollower Stackelberg game. In the game, the sellers lead the game
and decide the amount of the energy they sell and how to use the RES to produce energy. The buyers follow the action
of the sellers to provide the bidding price as their strategies. We consider the satisfaction to their benefits, social

framework.
KEYWORDS : Renewable Energy Sources, Energy Request, Bidding Price

Received: Jun 29, 2016; Accepted: Jul 27, 2016; Published: Aug 02, 2016; Paper Id.: IJEEERAUG20169

2. INTRODUCTION

Original Article

connection and RES usage as their payoff functions. From simulation result, we show the effectiveness of our proposed

In recent years, Microgrid (MG), a smaller-scale energy infrastructure, is proved to be valuable in its
resilience and reliability especially during extreme disasters. Plus, the exploit of RES for the energy generation for
reducing greenhouse gas emission and carbon footprint makes it envisioned to be one of the mainnext-generation
power production and management systems [1]-[2]. Microgrid refers to a small-scale power system with
distributed energy resources (DERs) and centralized power management and control mechanism [3]-[4]. It can
generate the power from RES such photovoltaic (PV), wind turbine (WT) and some other kind of energy sources
for the local resident and utilities to meet their load need. Because of its short transmission distance, MG system
can reduce the energy loss on the power line during the transmission. However, for RESs, the main feature is its
intermittency and high variability. Many mechanisms have been proposed such battery management and resource
scheduling[5]-[7]. Therefore, at a given time, some MGs can have surplus energy and some of them cant generate
enough energy by themselves. So for the future MGN, the energy trading between MGs will be an indispensable
part in the electricity market. Besides, the development of communication technique has made the information
sharing between individuals easier. Furthermore, the online social networks have become a promising web-based
solution of communication channels for disaster response and emergency management. Thus the communication
by social network will also make some connection and influence between different MGs.

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Youbiao He & Jin Wei

Some works have been done for the energy trading between MGs, among which the most direct and efficient
method is to make trading between different MGs. The one who has the surplus energy can sell their excess energy to the
one who has the need of energy. Therefore, to build an economic model in the electricity market, the game theoretic
method is a main method which has been proposed recently. Saadet al. [5] proposed a coalitional game theoretic method
aiming to reduce the power loss on the power line while transmitting. Liet al. [8] developed a hierarchical interactive
trading mechanism by considering centralized decision making to maximize the reward of the whole MG and distributed
auction for each individual in the MG by using Bayesian game method. In [9], the author considered the impact of different
RESs cost and service expense to the utility company by installing RESs and developed a game between the utility
company and MGs. The author of [10] proposed a multileader-multifollowerStackelberg game mechanism which is closest
to this paper. They developed a noncooperative strategies for the sellers and buyers in the trading between MGs.
Considering multiple complex social and environmental factors, we develop atrading mechanism involving the
influence of social relation to individual decision making and the cost of the various RESs such as PV, WT and expected
benefit from storing energy. In our work, the sellers will lead the game, who focus on making two decisions for each action
they do (1) which are the proportion of they sell to the total excess energy they have and (2) the proportion of the energy
they choose to get from the RES. For the buyer side, their decision is about bidding price they can offer for unit electricity
energy. Then the sellers will get benefit according to the amount of the energy they sell. And how much energy the buyers
can get depends on the price they can offer for unit energy. In this game, we define their payoff function as their
satisfaction to their corresponding strategies.
For rest of this paper, in the Section 3, wewill describe the problem framework and the game theoretic method we
use in our framework. In Section 4, we will introduce the algorithm we use to find Nash Equilibrium (NE). And we present
the simulation results in Section 5. Then we will finalize our work by the conclusion in Section 6.

3. PROBLEM SETTING AND GAME THEORETIC MODEL

3.1 Problem Setting
Our Microgrid Social Network (MGSN) architecture consists of multiple MGs and they connect with each other
by common power line as shown in Figure 1. Each MG includes multiple RESs such PV, MT and energy storage system
(EES)large-scale battery system and flywheel energy storage [11]-[13]. The MGs having surplus energy act as the sellers
while the ones experiencing generation deficiency act as the buyers. So the MG as a seller can store the excess energy they
have generated and buyer can also buy more energy they need and store excess amount. The MGs can support each other
with local generation capacities through energy trading to achieve the overall reliability during an emergency in which the
main grid is not accessible. Besides, we also consider the interaction between different MGs by social connection. We
assume some of MGs in a MGN have the connection with the social network as shown in Figure 1. Through it, we consider
individuals decisioncan be influenced by the one who has the social connection with him. We design this impact into the
decision-making process.

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Social Connection
Physical Connection via Common Bus
MG 2
WT
MT ESS

MG 1
PV

MG 3
PV WT

ESS

ESS
Load

Load

Load

Power Grid
PV
ESS

WT

ESS

External
EES
MT

Load

MG 5

MG 4

Figure 1: A Typical Example of the Microgrid Social Network (MGSN) Architecture

Market information exchange and energy trading

MG 1

MG 2

MG 3
Market

MG 4

MG 5

Figure 2: The Framework of Information Exchange and Energy Trading Model

Our distributed energy trading mechanism is designed based on multileader-multifollowerStackelberg game
model as shown in Figure 2. In our mechanism, the sellers lead the game and decide the amount of the energy for sale and
the amount of energy obtained from the RESs. The buyers follow the actions of sellers and make decisions on their bid
prices. The sellers will provide market with the energy amount they want to sell, and the buyers also offer the bidding price
for unit electricity price to the market. Then the market will dispatch the energy they get from sellers to the buyers
according to buyers bidding price; and also distribute total benefit to sellers based on the amount of the energy they
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Youbiao He & Jin Wei

provide.
Game Theoretic Model
We set
each

as the set of buyers and

, we define

as the set of sellers respectively where

as the set of the proportion of energy they want sell andlet

the energythey get from the RESs to the traditional DERs. Thus we set

and

are two not disjoint sets. For

denote the set of the proportion of

=[0 1] and

as Seller s

available strategy sets. As described in Eq. (1), we define the payoff function of each Seller

as its satisfaction from the

received revenue, that from the stored energy, and that from social interactions with other sellers.
(1)
where

is a weight parameter,

the revenue satisfaction, and

defined in Eq.(2) is the satisfaction from the stored energy,

defined in Eq.(4) is the satisfaction from social interaction, and

defined in Eq.(3) is

defined in Eq.(5) denotes

the cost according to the energy generation and the stochastic characteristics of RESs.
(2)

(3)

(4)
(5)
Where

denotes the percentage of the total surplus energy

trading, then the energy obtained by Buyer

is the bid price given by Buyer ,

through the energy trading is:

represents the conventional electricity generation belonging to Seller ,

is the ratio of Seller s renewable energy generation to

sellers, and

belonging to Seller that is used for energy

, s,

, , are weight parameters,

is the number of

is the number of buyers.

(6)

Considering the impact of social interaction, the final bid price of Buyer

, is modeled as:

(7)
where

is impact factor of social interaction.

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4. ALGORITHM
In this section, we introduce the algorithm we use to find the Nash Equilibrium point for the game we define in
last section.
For each player in a game, the goal is to find the best response strategy to maximize their payoff value. Let
denote player s strategy in a game and
actions and let
strategy

denotes the action vector including all players

be the actions set and

be the payoff function of player . Then for each player , the best response

can be denoted as:

Where

is the action set of all other players expect player . Then the NE is a

point at which all the players get their best response strategies and on one has the motivation to deviate his strategy [14].
We denote it as:

In our work, to find the NE point, we use NikaidoIsoda function which is proposed in [15]. The NikaidoIsoda
function is defined as:

(8)
Where

denote the payoff value of player

their strategy

. Therefore,

strategy from

to

when he choose strategy

and others have the decision of

denotes the improvement of player s payoff value when he changes his

. And the right side of the equation (8) represents the sum of all players payoff values improvement.

Thus, at NE point, we can get

such that no one player can find a higher payoff value than that by choosing the

previous strategy as described in equation (9).

(9)
In each iteration step, we try to find the strategy of one playerto maximize the value of this NikaidoIsoda
function for a constant set of others strategies. Then we update the players strategy until we find its convergent point
which is NE point. In our algorithm, we set the stop condition as follows:
(10)
where

is the stop threshold which is a small value compared with payoff value of the player.

In our work, the players are sellers and buyers. The strategy of the Seller consists of two components,

and

Thus, each seller has to make two-strategy decision once which makes the NikaidoIsoda function defined in equation (8)
a two-variable function. The strategy of the Buyer is the bidding price

. From the payoff functions for sellers and

buyers,as defined in equations (1) and (6), we can build the NikaidoIsoda functions for sellers and buyers in our game:

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Youbiao He & Jin Wei

(11)
Then the stop condition described in equation (10) becomes:

(12)
As shown in Table I, in our algorithm, we first set the initial strategy for all sellers who lead the game. We set
vectors

and

as the starting point of our algorithm for sellers and buyers strategy respectively. Thenthe

sellers make their decisions first to maximize the payoff value. And the buyer will follow the strategy of the sellers. They
make their decisions individually with the known previous decisions

and

of each seller, the energy that each seller can

generate in total and the strategy of each other buyers bidding price to find the maximum payoff value defined in
equation (6). Then we calculate the value of the NikaidoIsoda function defined in equation (11) to check stop condition, if
its value is larger than the threshold

as described as equation (12), the algorithm will come to the seller side, they will

make the new decisions individually until the stop condition defined in equation (12) is satisfied.
Table I: Algorithm of Finding the NE Point
Start
Step 1: Initialize
,
and
.
Step 2: Find the best response strategy
and of each seller with the information
of previous strategies of all other players.
Step 3: Update sellers strategies considering the impact of social connection defined in
Equation (4).
Step 4: Check the stop condition defined as Equation (12), if it is satisfied, stop the
algorithm and go to end, otherwise, go to Step 5.
Step 5: Find the best response strategy of each buyer with the information of previous
strategies of all other players.
Step 6: Update buyers strategies considering the impact of social connection defined in
Equation (7).
Step 7: Check the stop condition defined as Equation (12), if it is satisfied, stop the
algorithm and go to end, otherwise, go to Step 2.
End

5. SIMULATION RESULTS
In our simulation, we evaluate our work using two case studies. In the first one, we observe the influence of the
RES to the sellers satisfaction and strategies. In the second case, we investigate the effect of the social relationship. We
generate the simulation results for seller and buyer side respectively and in seller side. Then we observe and analyze the
changing of satisfactions and strategies after considering social network. In these two cases, we will consider a MGSN
consisting of 20 MGs. In an emergency, 4 of the MGs act as sellers and 16 of the MGs act as buyers.

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5.1 Case Study I

In this case, we set 4 sellers and 16 buyers. And the excess energy each seller has and the energy each buyer need
is shown in Figure 3 Figure 4 and Figure 5 show our simulation results. From Figure 4, we can see that the adoption of
RES will increase the satisfaction of sellers and also buyers. This is reasonable because comparing with traditional power
generation, the resources for producing energy by RES is almost free. But we also can see from Figure 5 (b) that the
adoption of RES is not 100%. This is because the cost of RES will increase with the increment of energy production by
RES.

(a) The Excess Energy of Each Seller

(b) The Energy of Each Seller Need

Figure 3: Excess Energy and Energy Request

Figure 4 (a): Payoff Values for Individual Sellers When

They Do Not Adopt and Adopt RES

Figure 4 (b): Payoff Values for Individual Buyers When Sellers

Do Not Adopt and Adopt RES

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Youbiao He & Jin Wei

Figure 5 (a): Sellers Selled Energy Amount Without and With RES

Bid prices/k$/MW

Figure 5 (b): Sellers Adoption Percentage of RES

Figure 5 (c): Buyers Bid Prices Without and With RES

Figure 5 (a) and (c) show the strategy changing before and after adopting RES. We can see that after adopting
RES, the buyer would like to sell more energy but the most of bid prices from the buyers almost do not change which is
why they can get more payoff value when sellers provide more energy. In Figure 5 (c), the buyer 13 increases his bid price
largely, and we can see from Figure 4 (b) that its payoff value also increases a lot which became the motivation of his
action changing
5.2 Case Study II
In this case, we set the same sellers and buyers as that in case I which is as shown in Figure 3. We will investigate
the impact of the social network. In our framework, we design it into the decision making process of each seller and buyer

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and payoff function of each seller as described in equation (7). In our work, we consider first three sellers and first three
buyers have the social relationship by which one individuals decision will be influenced by others.
Figure 6 shows the payoff value changing of sellers and buyers. We can observe from Figure 6 (a) that after
considering social relationship influence of different MGs, the payoff value of each seller will decrease. That is because
they deviate the best response strategy when the players change their decision making process. However, due to our
threshold of stop condition is not 0, they can still find their satisfactory strategies to get relax NE point. For the buyer side,
we can get the same conclusion for the individuals who have the social connection from Figure 6 (b).

Figure 6 (a): Payoff Values for Individual Sellers when Consider and Not Consider Social Network
Figure 7 shows our simulation results of the decision making of sellers and buyers. We can observe the same
phenomenon from Figure 7 (a) (b) (c) that after considering social network the individuals who have the link of social
network will make the closer decisions which is very consistent with that in practical world. The people can adopt the
opinions of their relatives or close friends.

Figure 7(a): Sellers Traded Energy Amount when Consider and Not Consider Social Network

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Youbiao He & Jin Wei

Figure 7 (b): Sellers Adoption Percentage of RES when

Consider and Not Consider Social Network

Figure 7 (c): Buyers Bid Prices when Consider and Not Consider Social Network

6. CONCLUSIONS
In this paper, we propose a self-healing resilient MGSN architecture which provides a promising design solution
for the critical energy infrastructure. In the architecture, we develop a game-theoretical paradigm to design the distributed
energy trading between the MGs. We consider the influence of the RES and social connection to their strategies and
satisfactions. From our simulation results, we can get the conclusion that sellers adoption of the RES will improve the
satisfactions of all the sellers and buyers, and that can let sellers provide more energy for MGSN. And social network link
can make people to do the closer decision including sellers RES adoption and buyers bid price providing. This
phenomenon can be explored to improve security of electricity market trading for the future work such as detecting
traditional unobservable attack by false data injection or denial of service.
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