Fair Cost Allocation in Energy Communities Under Forecast Uncertainty
Energy communities (ECs) are an increasingly studied path toward improving prosumer coordination. A central challenge of ECs is to allocate cost savings fairly to members. While many allocation mechanisms have been developed, existing literature does not account for the implications of inaccurate fo...
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IEEE
2025-01-01
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| Series: | IEEE Open Access Journal of Power and Energy |
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| Online Access: | https://ieeexplore.ieee.org/document/10807294/ |
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| author | Michael Eichelbeck Matthias Althoff |
| author_facet | Michael Eichelbeck Matthias Althoff |
| author_sort | Michael Eichelbeck |
| collection | DOAJ |
| description | Energy communities (ECs) are an increasingly studied path toward improving prosumer coordination. A central challenge of ECs is to allocate cost savings fairly to members. While many allocation mechanisms have been developed, existing literature does not account for the implications of inaccurate forecasts on the fairness of the allocation. We introduce a set of fairness conditions for imperfect knowledge allocation and show that these conditions constitute a Pareto front. We demonstrate how a well-established allocation scheme, the Shapley value mechanism (SVM), has unfavorable consequences for flexibility-providing community members and generally does not yield solutions on this Pareto front. In contrast, we interpret dispatch cost under imperfect knowledge as being composed of two components. The first represents the cost under perfect knowledge, and the second represents the cost arising from inaccurate forecasts. Our proposed mechanism extends an SVM-based allocation of the perfect knowledge cost by allocating the remaining cost in a way that guarantees finding solutions on the Pareto front. To this end, we formulate a convex multi-objective optimization problem that can efficiently be solved as a linear or quadratic program. |
| format | Article |
| id | doaj-art-4747a1f75521477bb81018ca23230e48 |
| institution | Kabale University |
| issn | 2687-7910 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Open Access Journal of Power and Energy |
| spelling | doaj-art-4747a1f75521477bb81018ca23230e482025-01-28T00:02:15ZengIEEEIEEE Open Access Journal of Power and Energy2687-79102025-01-011221110.1109/OAJPE.2024.352041810807294Fair Cost Allocation in Energy Communities Under Forecast UncertaintyMichael Eichelbeck0https://orcid.org/0000-0002-1522-8767Matthias Althoff1https://orcid.org/0000-0003-3733-842XDepartment of Computer Engineering, Technical University of Munich, Garching, GermanyDepartment of Computer Engineering, Technical University of Munich, Garching, GermanyEnergy communities (ECs) are an increasingly studied path toward improving prosumer coordination. A central challenge of ECs is to allocate cost savings fairly to members. While many allocation mechanisms have been developed, existing literature does not account for the implications of inaccurate forecasts on the fairness of the allocation. We introduce a set of fairness conditions for imperfect knowledge allocation and show that these conditions constitute a Pareto front. We demonstrate how a well-established allocation scheme, the Shapley value mechanism (SVM), has unfavorable consequences for flexibility-providing community members and generally does not yield solutions on this Pareto front. In contrast, we interpret dispatch cost under imperfect knowledge as being composed of two components. The first represents the cost under perfect knowledge, and the second represents the cost arising from inaccurate forecasts. Our proposed mechanism extends an SVM-based allocation of the perfect knowledge cost by allocating the remaining cost in a way that guarantees finding solutions on the Pareto front. To this end, we formulate a convex multi-objective optimization problem that can efficiently be solved as a linear or quadratic program.https://ieeexplore.ieee.org/document/10807294/Energy communitycost allocationfairnessforecast uncertaintyShapley valuePareto optimality |
| spellingShingle | Michael Eichelbeck Matthias Althoff Fair Cost Allocation in Energy Communities Under Forecast Uncertainty IEEE Open Access Journal of Power and Energy Energy community cost allocation fairness forecast uncertainty Shapley value Pareto optimality |
| title | Fair Cost Allocation in Energy Communities Under Forecast Uncertainty |
| title_full | Fair Cost Allocation in Energy Communities Under Forecast Uncertainty |
| title_fullStr | Fair Cost Allocation in Energy Communities Under Forecast Uncertainty |
| title_full_unstemmed | Fair Cost Allocation in Energy Communities Under Forecast Uncertainty |
| title_short | Fair Cost Allocation in Energy Communities Under Forecast Uncertainty |
| title_sort | fair cost allocation in energy communities under forecast uncertainty |
| topic | Energy community cost allocation fairness forecast uncertainty Shapley value Pareto optimality |
| url | https://ieeexplore.ieee.org/document/10807294/ |
| work_keys_str_mv | AT michaeleichelbeck faircostallocationinenergycommunitiesunderforecastuncertainty AT matthiasalthoff faircostallocationinenergycommunitiesunderforecastuncertainty |