Towards a Socially Acceptable Competitive Equilibrium in Energy Markets

TL;DR

This paper proposes a decentralized control method to modify energy market dynamics, ensuring competitive equilibrium is both efficient and socially acceptable by keeping prices below a threshold.

Contribution

It introduces a dynamic feedback controller that guides agents to a socially acceptable competitive equilibrium in energy markets, balancing efficiency and fairness.

Findings

The proposed controller successfully maintains prices below the socially acceptable threshold.

The approach ensures convergence to a socially acceptable competitive equilibrium.

Theoretical results are validated through a case study.

Abstract

This paper addresses the problem of energy sharing between a population of price-taking agents who adopt decentralized primal-dual gradient dynamics to find the Competitive Equilibrium (CE). Although the CE is efficient, it does not ensure fairness and can potentially lead to high prices. As the agents and market operator share a social responsibility to keep the price below a certain socially acceptable threshold, we propose an approach where the agents modify their utility functions in a decentralized way. We introduce a dynamic feedback controller for the primal-dual dynamics to steer the agents to a Socially acceptable Competitive Equilibrium (SCE). We demonstrate our theoretical findings in a case study.