Bi-Objective-Based Cost Allocation for Cooperative Demand-Side Resource Aggregators

Abstract

This paper presents a cooperative game theoretic approach to tackle the cost allocation problem for a virtual power plant which consists of multiple demand-side resource aggregators (DRAs) participating in the short-term two settlement electricity market. Given the considered game is balanced, we propose to employ the cooperative game theory's core cost allocation concept to efficiently allocate the bidding cost to the DRAs. Since the nonempty core contains many potential solutions, we develop a bi-objective optimization framework to determine the core cost allocation solution that can achieve efficient tradeoff between stability and fairness. To solve this problem, we jointly employ the ε-constraint and row constraint generation methods to construct the Pareto front, based on which we can specify a desired operation point with reasonable computation effort. Numerical studies show that our proposed design can efficiently exploit the nonempty core to find a cost allocation for the participants, achieve the desirable tradeoff between stability and fairness, and can address the practical DRAs' large-scale cooperation design.