A Stackelberg Game-Based Model of the Distribution Network Planning in Local Energy Communities

The electrical characteristics of distribution networks (DNs) are drastically changing, which is mainly due to widespread adoption of small-scale distributed energy resources (DERs) by end-users. In these cases, conventional planning models may lead to overinvestment choices. This paper presents a planning model for utility companies that explicitly incorporates a model of end-users’ energy-related decisions, considering a neighborhood energy trading scheme (NETS). The model is formulated based on the Stackelberg game (SG) approach, which guarantees the optimality of the final solution for each user and the utility. The proposed mixed-integer second-order cone programming (MISOCP) problem finds the optimal investment plan for transformers, lines, distributed generators (DGs), and energy storage systems (ESSs) for the utility, considering the scenarios of end-users’ investments in rooftop photovoltaic (PV) and battery systems that maximize their benefits. Additionally, a dynamic network charge (NC) scheme is designed to rationalize the network use. Also, Benders decomposition (BD) is used to improve the convergence of the solution algorithm. The numerical studies on a real 23-bus low voltage (LV) network in Perth, Australia, using real-world data reveals that the proposed planning model offers the lowest total cost and the highest penetration of DERs in comparison with conventional models.