A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks

Yasuaki Wasa, Kenji Hirata, Kenko Uchida

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)

Abstract

This paper considers interdependent electric power and gas supply networks and investigates a dynamic contract mechanism between risk-averse prosumers and a risk-neutral aggregator. The aggregator tries to manage not only financial risks but also power energy and gas energy generated by the prosumers in the presence of uncertain and volatile risk of energy generation processes. The aggregator will determine an incentive condition required of the prosumers so as to indirectly control their actions preferable for the aggregator. We first formulate a novel dynamic contract problem, where each prosumer minimizes an exponential-type cost functional with risk aversion under energy dynamical systems. The problem is regarded as a principal-agent problem in contract theory and the prosumers' optimization problem can be reduced to a Linear Exponential Quadratic Gaussian dynamic game problem. Most part of the solution to the problem considered here can be obtained analytically, while we need to employ a numerical optimization technique to determine the aggregator's action. The effectiveness of the risk-sharing between aggregator and prosumers induced by the proposed mechanism is demonstrated through a simulation.

Original languageEnglish
Title of host publication2017 Asian Control Conference, ASCC 2017
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages1222-1227
Number of pages6
Volume2018-January
ISBN (Electronic)9781509015733
DOIs
Publication statusPublished - 2018 Feb 7
Event2017 11th Asian Control Conference, ASCC 2017 - Gold Coast, Australia
Duration: 2017 Dec 172017 Dec 20

Other

Other2017 11th Asian Control Conference, ASCC 2017
CountryAustralia
CityGold Coast
Period17/12/1717/12/20

Fingerprint

Risk Sharing
Energy
Financial Risk
Dynamic Games
Exponential Type
Risk Aversion
Numerical Optimization
Volatiles
Numerical Techniques
Incentives
Optimization Techniques
Dynamical system
Gas
Optimization Problem
Minimise
Costs
Simulation

ASJC Scopus subject areas

  • Control and Optimization

Cite this

Wasa, Y., Hirata, K., & Uchida, K. (2018). A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks. In 2017 Asian Control Conference, ASCC 2017 (Vol. 2018-January, pp. 1222-1227). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/ASCC.2017.8287345

A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks. / Wasa, Yasuaki; Hirata, Kenji; Uchida, Kenko.

2017 Asian Control Conference, ASCC 2017. Vol. 2018-January Institute of Electrical and Electronics Engineers Inc., 2018. p. 1222-1227.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Wasa, Y, Hirata, K & Uchida, K 2018, A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks. in 2017 Asian Control Conference, ASCC 2017. vol. 2018-January, Institute of Electrical and Electronics Engineers Inc., pp. 1222-1227, 2017 11th Asian Control Conference, ASCC 2017, Gold Coast, Australia, 17/12/17. https://doi.org/10.1109/ASCC.2017.8287345
Wasa Y, Hirata K, Uchida K. A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks. In 2017 Asian Control Conference, ASCC 2017. Vol. 2018-January. Institute of Electrical and Electronics Engineers Inc. 2018. p. 1222-1227 https://doi.org/10.1109/ASCC.2017.8287345
Wasa, Yasuaki ; Hirata, Kenji ; Uchida, Kenko. / A dynamic contract mechanism for risk-sharing management on interdependent electric power and gas supply networks. 2017 Asian Control Conference, ASCC 2017. Vol. 2018-January Institute of Electrical and Electronics Engineers Inc., 2018. pp. 1222-1227
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