A bidirectional payment system for mitigating the supply–demand imbalance among prosumers based on the core of coalitional game theory under the enhanced use of renewable energy

Abstract

The imbalance between supply and demand is a crucial problem under the enhanced use of renewable energy after a feed-in program expires. This paper presents a new pricing arrangement for mitigating this supply–demand imbalance in the form of a payoff allocation. The methodology and findings, which are directly connected with the policy implications, are summarized as follows. First, a group of local prosumers on the grid network should be considered because the imbalance matters locally. Second, the value of the group can be formulated by the discrepancies between production and consumption in the period in question. Third, based on the core of coalitional game theory, the proposed payment system prescribes that if production was less than consumption, it is rewarded with the reservation price of consumers and vice versa. Two further recommendations are made. One is that the payoff calculation should be made by dividing the period into the shortest possible sub-periods. The other is that information on the current production and consumption of the group should be provided. A simulation is also presented to illustrate how the proposed payment system works. • This study addresses mitigating the imbalance between supply and demand. • A bidirectional payment system for mitigating this imbalance is presented. • A group of prosumers is considered. • The core of coalitional game theory is utilized for the payoff allocation. • A method of selecting an element in the core is developed.