A Novel Game-Theoretic Framework for Recos Participation in Congestion Management Based on Economical Signals of ISO

The purpose of this paper is to address a shortfall in the literature in dealing with the congestion management problem through reinforcing a collaboration between ISO and Recos in implementing the DR program. Such reinforcement is developed based on defining some important economic signals which ISO submits to Recos for demand reduction when dealing with DRAs. A Stackelberg game is used to design a DR trade among Recos and DRAs, where Recos act as leaders, determining the values of demand reduction based on economical signals of ISO. DRAs as the follower of the game will compete based on Recos's strategy for maximizing their profits. In order to define the DR impact of each bus on congestion alleviation, the congestion elasticity concept is introduced and used in the Recos profit calculations.The performance of the proposed method is evaluated by using a test power system in different scenarios.