Fair division of costs in green energy markets

TY - JOUR

T1 - Fair division of costs in green energy markets

AU - Hougaard, Jens Leth

AU - Kronborg, Dorte

AU - Smilgins, Aleksandrs

PY - 2017

Y1 - 2017

N2 - This paper considers cost allocation in networks where agents are characterized by stochastic demand and supply of a non-storable good, e.g. green energy. The grid itself creates possibilities of exchanging energy between agents and we propose to allocate common costs in proportion to the economic gain of being part of the grid. Our model includes a set of fundamental requirements for the associated trading platform. In particular, it is argued that a suitable mechanism deviates from a traditional market. The approach is illustrated by simulations.

AB - This paper considers cost allocation in networks where agents are characterized by stochastic demand and supply of a non-storable good, e.g. green energy. The grid itself creates possibilities of exchanging energy between agents and we propose to allocate common costs in proportion to the economic gain of being part of the grid. Our model includes a set of fundamental requirements for the associated trading platform. In particular, it is argued that a suitable mechanism deviates from a traditional market. The approach is illustrated by simulations.

U2 - 10.1016/j.energy.2017.06.122

DO - 10.1016/j.energy.2017.06.122

M3 - Journal article

SN - 0360-5442

VL - 139

SP - 220

EP - 230

JO - Energy

JF - Energy

ER -