Incentivizing distributed energy resource aggregation in energy and capacity markets: An energy sharing scheme and mechanism design

Energy sharing has gained substantial popularity in improving the controllability of distributed energy resources (DERs). The existing literature focuses on how energy sharing contributes to local power balances, but the benefits of sharing DERs for peak shaving has not been explored. In this paper, we propose a novel energy sharing scheme, in which an aggregator takes advantage of users’ shared DERs for peak shaving and load balance. Based on an energy and capacity market framework, an integrated energy sharing model is formulated to incorporate the reliability charge for the aggregator. Each user is modeled as an agent making strategic investments in solar and battery storage systems while considering sharing the idle DERs. To guarantee that every user has incentive to participate in the energy sharing scheme, we design an incentive mechanism that achieves a fair benefit allocation according to users’ contributions. A new index, termed sharing contribution rate (SCR), is presented that quantifies different users’ contributions to both energy sharing and peak shaving. Based on the users’ SCRs, an asymmetric Nash bargaining model is formulated for benefit allocation, which is solved in a decentralized manner. Case studies based on real-world datasets demonstrate that the proposed scheme can incentivize users to invest in and share DERs, thus effectively mitigating peak load.