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Real time Demand-Response algorithm is a real time price (RTP) based demand response (DR) algorithm which helps in obtaining optimal control of load devices in a facility. We form a virtual electricity trading process, where energy management center (EMC) calculates the virtual retail prices and allots to each device, from which devices purchases energy. Here EMC acts as the leader and devices in the facility are followers. So the Stackelberg game between one-leader and M-followers is formulated to extract interactions between them, and optimization problems are formed for each player of the game to assist in finding the optimal strategy. We also demonstrated the unique Stackelberg equilibrium of the Stackelberg game which gives the optimal strategy or optimal energy demands for each device. The results of the simulation showed that Stackelberg game based DR algorithm is successful to get the optimal load control of device at all RTP throughout the day.

A Real Time Price Based Demand-Response Algorithm for Smart Grids