Applications of Game Theory to Design and Operation of Modern Power Systems: A Comprehensive Review

Aviad Navon, Gefen Ben Yosef, Ram Machlev, Shmuel Shapira, Nilanjan Roy Chowdhury, Juri Belikov, Ariel Orda and Yoash Levron
Additional contact information
Aviad Navon: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Gefen Ben Yosef: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Ram Machlev: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Shmuel Shapira: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Nilanjan Roy Chowdhury: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Juri Belikov: Department of Software Science, Tallinn University of Technology, Akadeemia tee 15a, 12618 Tallinn, Estonia
Ariel Orda: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel
Yoash Levron: The Andrew and Erna Viterbi Faculty of Electrical Engineering, Technion—Israel Institute of Technology, Haifa 3200003, Israel

Energies, 2020, vol. 13, issue 15, 1-35

Abstract: In this work, we review papers that employ game theoretic tools to study the operation and design of modern electric grids. We consider four topics in this context: energy trading, energy balancing, grid planning, and system reliability, and we demonstrate the advantages of using game-theoretic approaches for analyzing complex interactions among independent players. The results and conclusions provide insights regarding many aspects of design and operation, such as efficient methodologies for expansion planning, cyber-security, and frequency stability, or fair-benefit allocation among players. A central conclusion is that modeling the system from the perspective of one entity with unlimited information and control span is often impractical, so correct modeling of the selfish behavior of independent players may be critical for the development of future power systems. Another conclusion is that correct usage of incentives by appropriate regulation or sophisticated pricing mechanisms may improve the social welfare, and, in several cases, the results obtained are as good as those obtained by central planning. Using an extensive content analysis, we point to several trends in the current research and attempt to identify the research directions that are currently at the focus of the community.

Keywords: game theory; power systems; control; management; electrical grids; review; survey; energy balancing; energy trading; grid planning; expansion planning; electric vehicles; renewable energy; reliability (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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