IEEE Signal Processing - July 2018 - 96

equilibrium always exists in stage two, and it depends on the
charging stations' service capacities and the price difference.
Similar examples of hierarchical and other games in the EV
domain can be found in [28]-[31].

Energy management in DERs and storage domains
The widespread adoption of DERs in power systems can play
a key role in creating a clean, reliable energy system with substantial environmental benefits. However, because energy
production from these DERs is highly intermittent, their integration into the power system poses a significant challenge in
maintaining the grid's stability. With suitable energy-storage
and energy-management techniques, such intermittency can
be addressed, and the benefits of using DERs can be increased
significantly. We discuss some of the game-theoretic techniques that have been used for effective energy trading in
DERs and storage domains.
The deployment of two-way communication enables interaction between the supply and demand sides of electricity
networks and allows users to exploit Nash games to design
energy-management schemes for DERs. In [32], for example,
a game-theoretic approach is analyzed to minimize the individual energy costs to consumers by scheduling their future
energy-consumption profiles. An instantaneous load-billing
scheme is designed to effectively convince consumers to shift
their time of peak consumption and to fairly charge the consumers for their energy purchases from the grid. With a view
toward reducing the cost of energy trading within the grid, a
day-ahead optimization process regulated by an independent
central unit has been proposed in [33]. The existence of optimal strategies is proven, and, furthermore, the authors present
a distributed algorithm to be run on the users' smart meters,
which provides optimal energy-production and storage strategies while preserving user privacy and minimizing required
central unit communication.
Auction games have been proposed for trading both storage
space and renewable energy from DERs [34], [35]. In [34], the
real-time implementation of a multiagent-based game-theoretic
reverse auction model for microgrid market operations featuring conventional and renewable DERs is discussed. The proposed methodology was realistically implemented in a smart
grid system at Florida International University, and the subsequent investigation shows that the proposed algorithm and the
industrial hardware-based infrastructure are suitable for implementation in the existing electric utility grid. Meanwhile, the
authors in [35] utilize an auction game to study the solution
of joint-energy-storage ownership sharing between multiple
shared facility controllers (SFCs) and those dwelling in a residential community. The auction process possesses both incentive-compatibility and individual-rationality properties and is
also capable of enabling the residential units (RUs) to decide the
fraction of their shared energy storage capacity with the SFCs
of the community to assist in storing electricity.
Recently, coalitional games have also received attention
for designing energy-trading mechanisms for users in residential areas that are equipped with DERs and storage
96

devices. For example, in [36], a coalitional game is used to
study the cooperation between small-scale DERs and energy
users to enable the direct trading of energy without going
through retailers. The asymptotic Shapley value is the core
of the coalitional game so that no small-scale DERs or energy users have an incentive to abandon the coalition, which
suggests the stable direct trading of energy for the proposed
pricing scheme. Furthermore, numerous case studies demonstrate that the scheme is suitable for practical implementation. The authors in [37] focus on comprehensive economic
power transactions of multiple microgrid networks with multiple agents; they design a three-stage algorithm based on a
coalitional game strategy and include request, exchange,
merge-and-split, and cooperative transaction stages. The
developed algorithm enables microgrids to form coalitions
where each microgrid can exchange power directly by paying
a transmission fee.
Similar to EV domains, hierarchical games also have been
used extensively for trading mechanisms in DERs and storage domains [1], [38]. (Due to constraints on the total number of references that can be cited, we are unable to provide
an overview of all of them.) In [38], a distributed mechanism
for energy trading among microgrids in a competitive market
via a multileader, multifollower Stackelberg game is proposed.
The game is formulated between different utility companies
and end users (EUs) to maximize the revenue of each utility
company and the payoff to each user, wherein the existence
of a unique Stackelberg equilibrium is proven. The researchers also study the impact of a hacker who can manipulate the
utility company's price information and discuss a scheme
based on shared reserve power to improve the grid's reliability and ensure its dependability. A similar type of game in
[1] is also designed, where the authors propose a three-party
energy-trading mechanism within a smart grid community;
in particular, a noncooperative Stackelberg game between the
residential users and the SFCs is proposed to explore how both
can benefit from received utility and the total cost reduction,
respectively, from trading energy with each other and the grid.
The maximum benefit to the SFCs, in terms of the reduction
of total costs, is determined by the unique and strategy-proof
Stackelberg equilibrium. Dynamic games have also been used
in DERs and storage domains for energy management [39].

Energy management in service domains
Game-theoretic approaches have been exploited to provide
services to the grid and consumers via the scheduling of energy-related activities by the users. These services include regulatory services, e.g., voltage and frequency regulation, demand
response regulation, and services related to the sharing of
resources, such as storage and designing incentives for users.
In this context, we can explain how Nash, auction, coalition,
and hierarchical games have been used to provide these services to energy users in EVs, DERs, and storage domains.
Nash games have mostly been used for providing demand
response services to the grid. On the one hand, Nash games are
sometimes exploited by the users to decide on the scheduling

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July 2018

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