Manipulability of cost and benefit allocation in cross-border electrical interconnection projects

A. Churkin, D. Pozo, J. Bialek, N. Korgin, E. Sauma

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Cross-border electrical interconnection projects are getting more attention all over the world. In this context, cost-benefit allocation is especially important due to the need for fair sharing of power trading benefits among the countries as well as allocating the investments in capital-intensive power lines. One convenient way of dealing with these issues is using cooperative game theory. However, even fair allocation methods, such as the Shapley value, do not guarantee the stability of negotiations on cross-border interconnection projects. The result of the allocation process strongly depends on the individual system's data provided by each party involved. In this regard, the parties could have incentives to strategically provide data that would benefit themselves in the cost-benefit allocation process, potentially hindering the stability of the coalition. In this paper, we address the negotiation stability issues in terms of players strategic behavior and manipulability of cost-benefit allocation rules.
Original languageEnglish
Title of host publication2019 IEEE Milan PowerTech, PowerTech 2019
Place of PublicationNew York
PublisherIEEE
Number of pages6
ISBN (Print)9781538647226
DOIs
Publication statusPublished - 2019

Keywords

  • Cooperative game theory
  • Cost-benefit allocation
  • Cross-border electrical interconnection
  • Electricity markets
  • Strategic behavior

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