Optimal Sharing and Fair Cost Allocation of Community Energy Storage

TL;DR

This paper presents a fair and computationally efficient method for sharing community energy storage among multiple buildings, optimizing size, operation, and cost allocation to enhance economic benefits and fairness.

Contribution

It introduces a nucleolus-based ex-post cost allocation method with a constraint generation technique, improving fairness and efficiency over existing approaches.

Findings

The proposed method achieves fairness with less than 1% characteristic function data.

It enhances economic benefits by approximately 1.83 times compared to individual storage.

The method is computationally efficient and outperforms the Shapley and proportional approaches.

Abstract

This paper studies an energy storage (ES) sharing model which is cooperatively invested by multiple buildings for harnessing on-site renewable utilization and grid price arbitrage. To maximize the economic benefits, we jointly consider the ES sizing, operation, and cost allocation via a coalition game formulation. Particularly, we study a fair ex-post cost allocation based on nucleolus which addresses fairness by minimizing the minimal dissatisfaction of all the players. To overcome the exponential computation burden caused by the implicit characteristic function, we employ a constraint generation technique to gradually approach the unique nucleolus by leveraging the sparse problem structure. We demonstrate both the fairness and computational efficiency of the method through case studies, which are not provided by the existing Shapley approach or proportional method. Particularly, only a small fraction of characteristic function (less than 1% for 20 buildings) is required to achieve the cost allocation versus the exponential information required by Shapley approach. Though there exists a minor increase of computation over the proportional method, the proposed method can ensure fairness while the latter fails in some cases. Further, we demonstrate both the building-wise and community-wise economic benefits are enhanced with the ES sharing model over the individual ES (IES) model. Accordingly, the overall value of ES is considerably improved (about 1.83 times).