Energy allocation and payment: a game-theoretic approach

Abstract

Nowadays, energy represents the most important resource; however, we need to face several energy-related rising issues, one main concern is how energy is consumed. In particular, how we can stimulate consumers on a specific behaviour. In this work, we present a model facing energy allocation and payment. Thus, we start with the explanation of the first step of our work concerning a mechanism design approach for energy allocation among consumers. More in details, we go deep into the formal description of the energy model and users’ consumption profiles. We aim to select the optimal consumption profile for every user avoiding consumption peaks when the total required energy could exceed the energy production. The mechanism will be able to drive users in shifting energy consumptions in different hours of the day. The next step concerns a payment estimation problem which involves a community of users and an energy distributor (or producer). Our aim is to compute payments for every user in the community according to the single user’s consumption, the community’s consumption and the available energy. By computing community-dependent energy bills, our model stimulates a users’ virtuous behaviour, so that everyone approaches the production threshold as close as possible. Our payment function distributes incentives if the consumption is lower than the produced energy and penalties when the consumption exceeds the resources threshold, satisfying efficiency and fairness properties both from the community (efficiency as an economic equilibrium among sellers and buyers) and the single user (fairness as an economic measure of energy good-behaving) points of view.