Use of cooperative game theory in power system fixed-cost allocation

Abstract

The use of cooperative game theory in power system fixed-cost allocation is investigated. The implementation of the allocation game in a bilateral transaction electricity market as well as in a pool market is discussed and the use of two well-known solution methods, nucleolus and the Shapley value, is explored. Conclusions are drawn which show that the Shapley value is a more preferable method when it is in the core of the game. For all the cases, results are illustrated in the IEEE 14-bus system.