Stable coalition formation among energy consumers in the smart grid

The vision of the Smart Grid includes demand-side peak shaving strategies, such as real-time pricing or profile’s based tariffs, to encourage consumption such that the peaks on demand are flattened. Up to date, most works along this line focused on optimising via scheduling of home appliances or micro-storage the individual user consumption. Alternatively, in this paper we propose to exploit the consumer social side by organising them into coalitions of energy consumers with complementary needs. To this end, we propose the concept of virtual energy consumer (VEC) to capture the notion of a number of energy consumers, coming together to buy electricity, as an aggregate. To create such VEC’s we consider that each consumer looks for potential partners for its coalitions through its contacts in a social network. In more detail, we propose a networkrestricted coalitional game, where: (i) each feasible VEC is evaluated with a metric that estimates the expected joint payment of the coalition of consumers within the electricity markets; (ii) the set of most efficient VEC’s are identified (by solving the corresponding Coalition Generation Problem); and (iii) the joint payment of each VEC is divided among its members in such a way that any consumer can not be better off by deviating and forming a new VEC (i.e., we compute a core-stable payoff distribution if this exists or alternatively detect core emptiness). Moreover, we evaluate our approach on consumption data for a set of households located in UK. Our analysis provides interesting insights into the relationship between structure and stability of VEC’s and prices within the electricity markets.