Application and Challenges of Coalitional Game Theory in Power Systems for Sustainable Energy Trading Communities

Filipe Bandeiras, Álvaro Gomes, Mário Gomes and Paulo Coelho ()
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Filipe Bandeiras: Smart Cities Research Center (Ci2-IPT), 2300-313 Tomar, Portugal
Álvaro Gomes: Institute for Systems Engineering and Computers at Coimbra (INESC Coimbra), 3030-290 Coimbra, Portugal
Mário Gomes: Smart Cities Research Center (Ci2-IPT), 2300-313 Tomar, Portugal
Paulo Coelho: Smart Cities Research Center (Ci2-IPT), 2300-313 Tomar, Portugal

Energies, 2023, vol. 16, issue 24, 1-42

Abstract: The role of prosumers is changing as they become active and empowered members of the grid by exchanging energy. This introduces bidirectional power flow and other challenges into the existing power systems, which require new approaches capable of dealing with the increased decentralization and complexity. Such approaches rely on game-theoretic models and mechanisms to analyze strategic decisions in competitive settings. More specifically, a coalitional game can encourage participants to trade energy with one another and obtain fair and sustainable outcomes. Therefore, the contents of this work address the coalitional game for sustainable energy trading, as well as the challenges associated with its application in power systems. This is achieved by identifying literature works that successfully implemented coalitional games in energy trading and management applications while providing an overview of solution concepts and discussing their properties and contributions to sustainability. Moreover, this work also proposes conditions that peer-to-peer energy trading should satisfy to be considered sustainable. Finally, a case study is presented to demonstrate how a coalitional game and various solution concepts can be successfully implemented to ensure the benefits and stability of cooperation in power systems. The weighted Shapley value is proposed to allocate profits among communities according to their level of sustainability.

Keywords: coalitional game; game theory; peer-to-peer energy trading; local energy market; energy community; power system; sustainability (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: 2023
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