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This paper studies a three party energy management problem in a userinteractive smart community that consists of a large number of residentialunits (RUs) with distributed energy resources (DERs), a shared facilitycontroller (SFC) and the main grid. A Stackelberg game is formulated to benefitboth the SFC and RUs, in terms of incurred cost and achieved utilityrespectively, from their energy trading with each other and the grid. Theproperties of the game are studied and it is shown that there exists a uniqueStackelberg equilibrium (SE). A novel algorithm is proposed that can beimplemented in a distributed fashion by both RUs and the SFC to reach the SE.The convergence of the algorithm is also proven, and shown to always reach theSE. Numerical examples are used to assess the properties and effectiveness ofthe proposed scheme.

Energy Management for a User Interactive Smart Community: A Stackelberg Game Approach