A Hierarchical Game Theory Based Demand Optimization Method for Grid-Interaction of Energy Flexible Buildings

Building demand-side management is an effective solution for relieving the peak and imbalance problems of electrical grids. How to explore the energy flexibility of buildings and to coordinate a variety of buildings with different energy flexibilities for effective interactions with smart grids are a great challenge. This paper proposes a game theory–based hierarchical demand optimization method for energy flexible buildings for achieving better grid interactions. This method consists of two optimization strategies at the grid and building levels. At the grid level, a demand-price interaction model for buildings and the grid is established to identify the Nash equilibrium solutions based on game theory; these solutions are used to determine the optimized energy demand of buildings and the associated electricity prices by accommodating the interests of all participants involved. At the building level, three types of buildings with different energy flexibilities are investigated to analyze the influence of building management strategies on grid interactions. The effectiveness of the proposed method is verified in a simulated case study. The results show that the optimization method can reduce building operational cost by 3–18%, reduce the fluctuation of the power grid by 30–50%, and ensure that the power grid increases income by 8–20%