Shapley Value-Based Payment Calculation for Energy Exchange between Micro- and Utility Grids

Robin Pilling, Shi Chung Chang and Peter B. Luh
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Robin Pilling: Graduate Institute of Industrial Engineering, National Taiwan University, Taipei 10617, Taiwan
Shi Chung Chang: Department of Electrical Engineering, National Taiwan University, Taipei 10617, Taiwan
Peter B. Luh: Department of Electrical and Computer Engineering, University of Connecticut, Storrs, CT 06269, USA

Games, 2017, vol. 8, issue 4, 1-12

Abstract: In recent years, microgrids have developed as important parts of power systems and have provided affordable, reliable, and sustainable supplies of electricity. Each microgrid is managed as a single controllable entity with respect to the existing power system but demands for joint operation and sharing the benefits between a microgrid and its hosting utility. This paper is focused on the joint operation of a microgrid and its hosting utility, which cooperatively minimize daily generation costs through energy exchange, and presents a payment calculation scheme for power transactions based on a fair allocation of reduced generation costs. To fairly compensate for energy exchange between the micro- and utility grids, we adopt the cooperative game theoretic solution concept of Shapley value. We design a case study for a fictitious interconnection model between the Mueller microgrid in Austin, Texas and the utility grid in Taiwan. Our case study shows that when compared to standalone generations, both the micro- and utility grids are better off when they collaborate in power exchange regardless of their individual contributions to the power exchange coalition.

Keywords: energy exchange; cooperative game theory; microgrid economics; Shapley value (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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