Demand response incentive decision optimization based on Stackelberg game

In the electricity spot market with unilateral bidding by power generators, demand response (DR) as a load-side resource to participate in the market can improve system flexibility. Therefore, it is necessary to introduce a demand response mechanism in the current spot market with unilateral bidding. This paper gives the methodology of the Stackelberg game for electricity market application research. Then, aiming at the issue of independent system operator (ISO)'s incentive decision in demand response, this paper considers the game pattern of multiple market players, and establishes a demand response model based on Stackelberg game. The existence and uniqueness of the Stackelberg equilibrium solution are proved. Finally, a 118-node network is used to verify the effectiveness of the proposed method.