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In this paper, the benefits of distributed energy resources (DERs) areconsidered in an energy management scheme for a smart community consisting of alarge number of residential units (RUs) and a shared facility controller (SFC).A non-cooperative Stackelberg game between RUs and the SFC is proposed in orderto explore how both entities can benefit, in terms of achieved utility andminimizing total cost respectively, from their energy trading with each otherand the grid. From the properties of the game, it is shown that the maximumbenefit to the SFC in terms of reduction in total cost is obtained at theunique and strategy proof Stackelberg equilibrium (SE). It is further shownthat the SE is guaranteed to be reached by the SFC and RUs by executing theproposed algorithm in a distributed fashion, where participating RUs complywith their best strategies in response to the action chosen by the SFC. Inaddition, a charging-discharging scheme is introduced for the SFC's storagedevice (SD) that can further lower the SFC's total cost if the proposed game isimplemented. Numerical experiments confirm the effectiveness of the proposedscheme.

Three-Party Energy Management With Distributed Energy Resources in Smart Grid