A comparison study on trading behavior and profit distribution in local energy transaction games. (15th December 2020)

• Record Type: Journal Article
• Authors: Chen, Yang; Park, Byungkwon; Kou, Xiao; Hu, Mengqi; Dong, Jin; Li, Fangxing; Amasyali, Kadir; Olama, Mohammed
• Is Part Of: Applied energy. Volume 280(2020)
• Publication Date: 2020-12-15
• Subjects: Local energy trading -- Shapley value -- Nash bargaining -- Non-cooperative game -- Bi-level optimization -- Benefit distribution; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2020.115941
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: Profit allocation in local transaction is compared for both non-/cooperative games. Bargaining solution is Shapley value if bargaining power is marginal contribution. Selfish leader could take away 89% of collective benefit by internal arbitraging. Max social welfare & fairer profit allocation can be achieved with uniform price. Abstract: With the increasing integration of distributed energy resources, localized peer-to-peer energy transactions are receiving more attention since they could absorb more distributed renewables locally and stabilize the power grid. To better study the trading behavior and provide guidance for a viable local market design, different game-theoretical frameworks including cooperative and non-cooperative games are established and compared in this study. For the cooperative grand coalition, the maximum social welfare is guaranteed, the Shapley value and bargaining based approaches are implemented for further profit redistribution. It is shown that the asymmetrical bargaining power can be critical in the final payment clearing and it is equivalent to the Shapley value allocation if prosumers bargain based on their marginal contributions. Non-cooperative trading is formulated by using a Stackelberg bilevel model in which the upper level has the privilege in internal price setting. However, system optimum is not obtained due to competition, and the selfish leader could take away 89% of the collective benefit by price-gap based arbitraging. Aiming for a long-lasting trading market, a virtual benevolent leader and a uniform price structure in which purchase price equals selling price are tested. Experimental results indicate that maximum social welfare and a fairer profit allocation can be achieved with a uniform price structure, regardless of the selfish or benevolent attitude.