Abstract
With increasing decarbonisation and accessibility to our energy systems and markets, there is a need to understand and optimise the value proposition for different stakeholders. Game-theoretic models represent a promising approach to study strategic interactions between self-interested private energy system investors. In this work, we design and evaluate a game-theoretic framework to study strategic interactions between profit-maximising players that invest in network, renewable generation and storage capacity. Specifically, we study the case where grid capacity is developed by a private renewable investor, but line access is shared with competing renewable and storage investors, thus enabling them to export energy and access electricity demand. We model the problem of deducing how much capacity each player should build as a non-cooperative Stackelberg-Cournot game between a dominant player (leader) who builds the power line and renewable generation capacity, and local renewable and storage investors (multiple followers), who react to the installation of the line by increasing their own capacity. Using data-driven analysis and simulations, we developed an empirical search method for estimating the game equilibrium, where the payoffs capture the realistic operation and control of the energy system under study. A practical demonstration of the underlying methodology is shown for a real-world grid reinforcement project in the UK. The methodology provides a realistic mechanism to analyse investor decision-making and investigate feasible tariffs that encourage distributed renewable investment, with sharing of grid access.
Highlights
Energy systems are becoming increasingly complex in response to the need to support decarbonisation of energy, with increasing integration of multi-vector energy services and adoption of variable renewable energy sources (RES)
Motivated by the specific techno-economic challenges experienced in developing smart local energy systems (SLES) in remote and distributed communities, this paper considers a two-location model, where excess RES generation and demand are not co-located, and where a private RES investor builds and shares access of a power line with local investors of renewable energy and storage, who are charged for using the line
VARIATION OF CAPACITY COSTS AND EQUILIBRIUM This section studies how the capacities installed by investors and their underlying profits vary in the light of varying capacity costs, i.e., the generation capacity costs cG1 and cG2 built by the line investor (Case I) and local generators (Case II), respectively, and the cost incurred by the storage player cS for installing storage capacity (Case III)
Summary
Energy systems are becoming increasingly complex in response to the need to support decarbonisation of energy, with increasing integration of multi-vector energy services and adoption of variable renewable energy sources (RES). As well as increasing decentralisation of energy systems, to support tailoring systems to specific community needs, such as enabling more active participation in energy choices, increasing self-consumption and resilience, there is progressive deregulation of energy markets to encourage more equitable access and market competition, which has gradually led to the introduction of multiple self-driven actors shaping the operation and management of energy systems. Optimal and efficient operation of energy systems relies increasingly on autonomous and often competitive actions performed by multiple actors that are often driven by their own utility-maximising objectives, studying of strategic interactions is to an increasing extent important. Prominent examples of research works from the literature that showcase the use of agents and game theory can be found in [2]–[6]
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