Distributed real-time pricing for smart grid considering sparse constraints and integration of distributed energy and storage devices

Purpose The purpose of this paper is to seek an efficient method to tackle the energy provision problem for smart grid with sparse constraints and distributed energy and storage devices. Design/methodology/approach A complex smart grid is first studied, in which sparse constraints and the complex make-up of different energy consumption due to the integration of distributed energy and storage devices and the emergence of multisellers are discussed. Then, a real-time pricing scheme is formulated to tackle the demand response based on sparse bilevel programming. And then, a bilevel genetic algorithm (BGA) is further designed. Finally, simulations are conducted to evaluate the performance of the proposed approach. Findings The considered situation is widespread in practice, and meanwhile, the other cases including traditional model without the sparse constraints can be seen as its extensions. The BGA based on sparse bilevel programming has advantages of “no need of convexity of the model.” Moreover, it is feasible without the need to disclose the private information to others; therefore, privacies are protected and system scalability is kept. Simulation results validate the proposed approach has good performance in maximizing social welfare and balancing system energy distribution. Research limitations/implications In this paper, the authors consider the sparse constraints due to the fact that each user can only choose limited utility companies per time slot. In reality, there exist some other sparse cases, which deserve further study in the future. Originality/value To the best of the authors’ knowledge, this is one of the very first studies to address pricing problems for the smart grid with consideration of sparse constraints and integration of distributed energy and storage devices.