The value of aggregators in local electricity markets: A game theory based comparative analysis. (September 2021)

• Record Type: Journal Article
• Authors: Rodríguez, Rafael; Negrete-Pincetic, Matías; Figueroa, Nicolás; Lorca, Álvaro; Olivares, Daniel
• Is Part Of: Sustainable energy, grids and networks. Volume 27(2021)
• Publication Date: 2021-09
• Subjects: Information -- Flexibility -- Potential game -- Adaptive expectations method; Renewable energy sources -- Periodicals; Smart power grids -- Periodicals; Electric power systems -- Periodicals; 333.794
• DOI: 10.1016/j.segan.2021.100498
• Languages: English
• ISSNs: 2352-4677

Abstract

Abstract: Demand aggregators are expected to have a key role in future electricity systems. More specifically, aggregators can facilitate the harnessing of consumers' flexibility. This paper focuses on understanding the value of the aggregator in terms of aggregation of both flexibility and information. We consider the aggregation of flexibility as the ability to exercise a direct control over loads, while the aggregation of information refers to knowledge of the flexibility characteristics of the consumers. Several game theory formulations are used to model the interaction between the energy provider, consumers and the aggregator, each with a different information structure. We develop a potential game to obtain the Nash equilibrium of the non-cooperative game with complete information and we analyze the system dynamics of consumers using the adaptive expectations method in an incomplete information scenario. Several key insights about the value of aggregators are found. In particular, the value of the aggregator is mainly related to the aggregation of information rather than flexibility, and flexibility is valuable only when it can be coordinated. In this sense, prices are not enough to guarantee an effective coordination.