Fair division of costs in green energy markets

Jens Leth Hougaard; Dorte Kronborg; Aleksandrs Smilgins

doi:10.1016/j.energy.2017.06.122

Fair division of costs in green energy markets

Jens Leth Hougaard, Dorte Kronborg, Aleksandrs Smilgins

Section for Production, Markets and Policy

2 Citations (Scopus)

Abstract

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.

Original language	English
Journal	Energy
Volume	139
Pages (from-to)	220-230
Number of pages	11
ISSN	0360-5442
DOIs	https://doi.org/10.1016/j.energy.2017.06.122
Publication status	Published - 2017

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10.1016/j.energy.2017.06.122

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title = "Fair division of costs in green energy markets",

abstract = "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.",

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AU - Hougaard, Jens Leth

AU - Kronborg, Dorte

AU - Smilgins, Aleksandrs

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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 -

Fair division of costs in green energy markets

Abstract

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