LAUSR

Abstract With the rapid development of information and energy generation technologies, the multi-level integrated energy system (IES) with multiple energy suppliers and end users has been vigorously promoted globally. In this study, the energy scheduling for a three-level IES is investigated by applying the hierarchical Stackelberg game approach. The IES is composed of one electricity utility company and one natural gas utility company (upper level), multiple same-structured smart energy hubs (S.E. hubs) that can produce electricity and heat simultaneously (middle level), and multiple users (lower level). By applying the Lagrange’s function, the operation strategies of all market participants are derived with analytical solutions, which are verified by a decentralized algorithm developed in this study. Simulation results show that the increase in the number of S.E. hubs decreases the energy prices received by users, increases the energy demands, and decreases the profit of each S.E. hub; therefore, each S.E. hub strives to crowd out other S.E. hubs as much as possible. Technological advancement is an effective strategy for S.E. hubs to rise above the market competition; therefore, S.E. hubs whose technological levels are lower than those of others are at an obvious disadvantage.