A Coalitional Game for Demand-Side Management in a Micro-Grid with Multiple Electricity Retailers
TL;DR
A coalition-formation algorithm based on multi-objective optimisation principles is proposed to identify coalition structures that balance retailer profit and consumer welfare and provides a tractable approach for analysing competition, coalition formation, and risk-aware pricing in multi-retailer demand-side management systems.
Abstract
This paper develops a demand-side management framework for electricity networks with multiple competing retailers. The interaction among retailers is formulated as a coalitional game, yielding a family of coupled mixed-integer optimisation problems in which retail prices, consumer power demands, and the network partition are jointly optimised. To solve this problem, we propose a coalition-formation algorithm based on multi-objective optimisation principles. The algorithm seeks to identify coalition structures that balance retailer profit and consumer welfare. We prove that the proposed algorithm converges in a finite number of steps and recovers a subset of weakly Pareto-efficient solutions of the coupled optimisation problems. The framework is further extended to a risk-sharing formulation, in which the objective is defined using conditional value-at-risk. Numerical simulations on an academic example demonstrate the method's behaviour and show that the resulting equilibrium partition set contains several admissible trade-offs between the competing objectives. The results provide a tractable approach for analysing competition, coalition formation, and risk-aware pricing in multi-retailer demand-side management systems.