Advances in Industrial Engineering

Advances in Industrial Engineering

A Stackelberg game model for power pricing in microgrids considering government intervention

Author
Department of Industrial Engineering, North Tehran Branch, Islamic Azad University, Tehran, Iran
Abstract
Microgrids are attracting more and more attention day by day with their renewable energy generation capabilities and many advantages. Microgrids are a small-scale energy generation and distribution system and are mostly responsible for distribution to nearby and local areas. The distribution and distribution of electricity can be handled by a distribution network operator (DNO). These centers purchase electricity from the microgrid at wholesale prices and sell it to the end consumer by adding a fee for transportation costs. However, pricing microgrids is always a challenge due to their uncertain nature in terms of energy production, consumer demand, etc. Efforts are being made to increase the use of microgrids and increase their construction and development compared to other methods. One effective way is to allocate government subsidies to these centers. However, allocating subsidies and planning them for microgrids is a complex program that needs to be reviewed. Despite their many advantages, microgrids have not been widely developed due to their high initial cost and lack of significant economic benefits, and most of the world's electricity is still supplied by power plants. This research deals with the pricing of microgrids by considering uncertainty in demand so that the results are closer to reality. Finally, in this paper, a pricing model is designed that includes the economic conditions of a microgrid consisting of renewable forces by considering uncertainty in demand. The role of subsidies considered by the government and allocated to microgrids and distribution network operators is also specified.
Keywords
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Articles in Press, Accepted Manuscript
Available Online from 04 October 2026