One of the biggest challenges facing the world today is the evolving power grid. As a response to anthropogenic climate change, countries are trying to integrate renewable energy and storage into modern power grids.
Because of the inherent decentralization of these power sources, there are many actors involved in this process:
from a home-owner installing solar panels on their roof, to a city forming a microgrid. In this project, game theory is used to dene the interactions between diferent actors and try to gain insight into how the power grid may be inuenced and evolve. The paper begins with the development of a non cooperative game
theory model to deduce how government discounts on solar cells can afect solar penetration into the grid.
The unique equilibrium of such a game is found and its meaning explored. The paper then moves onto a cooperative game which models when cities are expected to break of from the centralized grid to become energy self sufcient microgrids. The conditions for such a break of to happen are found and applied to the Israeli electric grid.