Transactive Energy Auction with Hidden User Information in Microgrid

TL;DR

This paper introduces a novel auction mechanism for transactive energy in microgrids that preserves user privacy while maximizing social welfare and ensuring fairness, supported by theoretical analysis and extensive simulations.

Contribution

It presents a new auction mechanism that maintains privacy, guarantees individual rationality, and incorporates a fair redistribution scheme in microgrid energy trading.

Findings

The auction maximizes social welfare under convex utility assumptions.

The mechanism ensures individual rationality and weak budget balance.

Simulations validate the effectiveness and fairness of the proposed approach.

Abstract

This research proposes a novel auction mechanism for transactive energy exchange between buyers and sellers, modeled as agents in a microgrid. The mechanism is implemented by a separate microgrid controller (MC) agent, and requires big data flow with the other agents through an iterative bidding process. Although private user information remains hidden to the MC, a theoretical analysis shows that under the assumption of convexity of the agents utilities, the proposed auction is still able to maximize the social welfare (SW), i.e. the aggregate utilities of the agents. In addition, it is shown that the mechanism exhibits the key desirable features of individual rationality and weak budget balance, guaranteeing that neither the payoff to any agent nor the net monetary revenue after termination, is negative. The proposed approach also incorporates a mechanism to redistribute the sellers shares in a fair manner. As an example, a maximum entropy based fair redistribution scheme is addressed. The theoretical analysis reported here is accompanied by extensive set of simulations that illustrate the various aspects of the proposed mechanism.