Integration of day-ahead energy market using VCG type mechanism under equality and inequality constraints

Yusuke Okajima, Toshiyuki Murao, Kenji Hirata, Kenko Uchida

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

    2 Citations (Scopus)

    Abstract

    Applications of decentralized operation of energy networks based on demand response are focused on by many researchers. Usually, methods for decentralized operation use prices to maximize social welfare, and require exchanges of true information in optimization process. However, we assume that generally rational market participants are not willing to reveal their private information. In a future competitive energy market, such rational consumers' selfish behaviors will reduce the whole network's benefit. In this paper, we propose a mechanism to integrate rational consumers' behavior into the social benefit. We first describe a concrete model for consumers, and then formulate a dynamic energy demand network in which a day-ahead market is formed with equality and inequality constraints. For this market, we propose a mechanism based on the Vickrey-Clarke-Groves (VCG) mechanism, which guarantees incentive compatibility and individual rationality. We show that this mechanism successfully inherits incentive compatibility and individual rationality of the VCG mechanism under equality and inequality constraints, which are not described in previous works. Finally, through numerical experiment, we demonstrate effectiveness of the mechanism.

    Original languageEnglish
    Title of host publication2015 IEEE Conference on Control and Applications, CCA 2015 - Proceedings
    PublisherInstitute of Electrical and Electronics Engineers Inc.
    Pages187-194
    Number of pages8
    ISBN (Print)9781479977871
    DOIs
    Publication statusPublished - 2015 Nov 4
    EventIEEE Conference on Control and Applications, CCA 2015 - Sydney, Australia
    Duration: 2015 Sep 212015 Sep 23

    Other

    OtherIEEE Conference on Control and Applications, CCA 2015
    CountryAustralia
    CitySydney
    Period15/9/2115/9/23

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    ASJC Scopus subject areas

    • Control and Systems Engineering

    Cite this

    Okajima, Y., Murao, T., Hirata, K., & Uchida, K. (2015). Integration of day-ahead energy market using VCG type mechanism under equality and inequality constraints. In 2015 IEEE Conference on Control and Applications, CCA 2015 - Proceedings (pp. 187-194). [7320631] Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/CCA.2015.7320631