Ensuring economic fairness in wide-area control for power systems via game theory

Abstract

Wide-area control helps in suppression of interarea oscillations in electric power systems, but potentially requires a substantial investment into the communication network needed to exchange state information. To provide companies with incentives to subsidize the wide-area communication links, a fair cost-allocation method based on the theory of cooperative network-formation games (NFG) is developed. The Nash Bargaining Solution (NBS) is utilized to fairly allocate the communication cost to the companies, which act as game-players. First, the wide-area control problem is formulated using the state-feedback-based LQR minimization approach, and the social communication cost is computed using a sparsity-promoting algorithm. Second, the disagreement point, which determines the maximum cost each area is willing to pay, is computed. This selfish cost is proportional to the energy an area saves by utilizing wide-area feedback and is derived from the Nash Equilibria (NEs) of two noncooperative NFGs, with and without wide-area feedback, respectively. Finally, the social cost is divided optimally among the companies, with all players benefiting from cooperation. The proposed cost allocation is illustrated for the Australian 50-bus power system example.