A cooperative game in Asian international electric power integration

Abstract

The paper examines effects of long-term international integration in the field of electric power industry. An advantage of integration is provoked by the fact that the cost of introducing new generation capacities significantly exceeds the cost of new power lines and transmission of the energy from existing power station of another country. When countries form a coalition, the problem is to allocate the coalition’s surplus over its participants. It can be solved by notions of cooperative game theory. The present investigation is based on the real data on six countries of the Northeast Asian region: Russia, Mongolia, China, North Korea, South Korea and Japan. Electric power system is described by the ORIRES model. This model optimizes power generation, power flows, and the development of generation capacities and power lines of the system. We formulate corresponding cooperative game in characteristic function form, and specify the Core and the Shapley value. Effects of international integration are discussed.