Probabilistic Microgrid Investment Planning with Integrated Game-Theoretic Demand Response Management

This Chapter presents an innovative modelling framework for advancing integrated metaheuristic-based energy planning optimization, with a focus on resilient, renewable community microgrids. The study brings attention to a critical aspect of long-term sustainable energy system planning by illuminating biases intrinsic to consumer preference-based demand response projections. Central to the framework is the emphasis on market-driven sectoral flexibility procurement, achieved through sealed-bid auctions, thereby optimizing social welfare, improving demand response capacity liquidity, and promoting sectoral stability. To this end, the integration of game theory is highlighted as a means to leverage demand-side flexibility for community-level clean energy projects. Further, navigating the uncertainties stemming from non-dispatchable sources and smart grid interventions, the Chapter advocates for a comprehensive evaluation involving holistic uncertainty-aware models for renewable system planning. In this context, a novel probabilistic investment planning framework is introduced, which incorporates climatological, demand, and price uncertainties within a stochastic microgrid sizing model integrated with demand response solutions. The significance of this framework lies in its capacity to address gaps in uncertainty-aware methodologies and the integration of operational and investment planning. By synergizing intricate modelling with practical implementation considerations, the Chapter establishes a guiding framework that not only enriches scholarly deduction, but also aids practical, sustainable energy decision-making. The efficacy of the approach is substantiated through numerical simulations of a case study in Aotearoa New Zealand, to validate the applicability of the results.