IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i4p1756-d1063765.html
   My bibliography  Save this article

Empirical Study of Stability and Fairness of Schemes for Benefit Distribution in Local Energy Communities

Author

Listed:
  • Steffen Limmer

    (Honda Research Institute Europe GmbH, 63073 Offenbach, Germany)

Abstract

The concept of local energy communities is receiving increasing attention. However, the question of how to distribute the benefit of a community among its members is still open. It is commonly desired that the benefit distribution is fair and stable. While benefit distribution schemes such as the nucleolus, Shapley value and Shapley-core are known to perform well in terms of fairness and stability, studies have shown that none of them can guarantee full fairness and stability at the same time. However, the existing studies neglect the temporal component. Hence, in order to gain more insights into the stability and fairness of the three aforementioned distributions in practice, we investigate their performance over time in simulation experiments on real-world data from Australian households. In about 90% of the cases, the Shapley value yielded a reasonably stable distribution, while the nucleolus yielded a reasonably fair distribution in about 75% of the cases. Furthermore, the experiments show an impact of the community size on the stability and fairness of the investigated distributions. One can conclude that for small communities, the Shapley value is the best choice, but that the nucleolus and Shapley–core become more and more attractive with increasing size of the community.

Suggested Citation

  • Steffen Limmer, 2023. "Empirical Study of Stability and Fairness of Schemes for Benefit Distribution in Local Energy Communities," Energies, MDPI, vol. 16(4), pages 1-16, February.
  • Handle: RePEc:gam:jeners:v:16:y:2023:i:4:p:1756-:d:1063765
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/4/1756/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/16/4/1756/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. René van den Brink, 2002. "An axiomatization of the Shapley value using a fairness property," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(3), pages 309-319.
    2. Norbu, Sonam & Couraud, Benoit & Robu, Valentin & Andoni, Merlinda & Flynn, David, 2021. "Modelling the redistribution of benefits from joint investments in community energy projects," Applied Energy, Elsevier, vol. 287(C).
    3. Abada, I. & Ehrenmann, A. & Lambin, X., 2017. "On the viability of energy communities," Cambridge Working Papers in Economics 1740, Faculty of Economics, University of Cambridge.
    4. Aguiar, Victor H. & Pongou, Roland & Tondji, Jean-Baptiste, 2018. "A non-parametric approach to testing the axioms of the Shapley value with limited data," Games and Economic Behavior, Elsevier, vol. 111(C), pages 41-63.
    5. Gjorgievski, Vladimir Z. & Cundeva, Snezana & Markovska, Natasa & Georghiou, George E., 2022. "Virtual net-billing: A fair energy sharing method for collective self-consumption," Energy, Elsevier, vol. 254(PB).
    6. Fioriti, Davide & Frangioni, Antonio & Poli, Davide, 2021. "Optimal sizing of energy communities with fair revenue sharing and exit clauses: Value, role and business model of aggregators and users," Applied Energy, Elsevier, vol. 299(C).
    7. SCHMEIDLER, David, 1969. "The nucleolus of a characteristic function game," LIDAM Reprints CORE 44, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chessa, Michela & Hanaki, Nobuyuki & Lardon, Aymeric & Yamada, Takashi, 2023. "An experiment on the Nash program: A comparison of two strategic mechanisms implementing the Shapley value," Games and Economic Behavior, Elsevier, vol. 141(C), pages 88-104.
    2. Michela Chessa & Nobuyuki Hanaki & Aymeric Lardon & Takashi Yamada, 2023. "An Experiment on Demand Commitment Bargaining," Dynamic Games and Applications, Springer, vol. 13(2), pages 589-609, June.
    3. Ibrahim Abada & Andreas Ehrenmann & Xavier Lambin, 2018. "Unintended consequences: The snowball effect of energy communities," Working Papers EPRG 1812, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    4. Gjorgievski, Vladimir Z. & Cundeva, Snezana & Markovska, Natasa & Georghiou, George E., 2022. "Virtual net-billing: A fair energy sharing method for collective self-consumption," Energy, Elsevier, vol. 254(PB).
    5. Emanuele Guerrazzi & Dimitri Thomopulos & Davide Fioriti & Ivan Mariuzzo & Eva Schito & Davide Poli & Marco Raugi, 2023. "Design of Energy Communities and Data-Sharing: Format and Open Data," Energies, MDPI, vol. 16(17), pages 1-26, August.
    6. Cremers, Sho & Robu, Valentin & Zhang, Peter & Andoni, Merlinda & Norbu, Sonam & Flynn, David, 2023. "Efficient methods for approximating the Shapley value for asset sharing in energy communities," Applied Energy, Elsevier, vol. 331(C).
    7. Almendra Awerkin & Paolo Falbo & Tiziano Vargiolu, 2023. "Optimal Investment and Fair Sharing Rules of the Incentives for Renewable Energy Communities," Papers 2311.12055, arXiv.org.
    8. Cubukcu, K. Mert, 2020. "The problem of fair division of surplus development rights in redevelopment of urban areas: Can the Shapley value help?," Land Use Policy, Elsevier, vol. 91(C).
    9. Oishi, Takayuki & Nakayama, Mikio & Hokari, Toru & Funaki, Yukihiko, 2016. "Duality and anti-duality in TU games applied to solutions, axioms, and axiomatizations," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 44-53.
    10. Mario Guajardo & Kurt Jörnsten & Mikael Rönnqvist, 2016. "Constructive and blocking power in collaborative transportation," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(1), pages 25-50, January.
    11. Gianfranco Gambarelli, 1999. "Maximax Apportionments," Group Decision and Negotiation, Springer, vol. 8(6), pages 441-461, November.
    12. H. Andrew Michener & Daniel J. Myers, 1998. "Probabilistic Coalition Structure Theories," Journal of Conflict Resolution, Peace Science Society (International), vol. 42(6), pages 830-860, December.
    13. Gonzalez, Stéphane & Rostom, Fatma Zahra, 2022. "Sharing the global outcomes of finite natural resource exploitation: A dynamic coalitional stability perspective," Mathematical Social Sciences, Elsevier, vol. 119(C), pages 1-10.
    14. Camelia Bejan & Juan Gómez, 2012. "Axiomatizing core extensions," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(4), pages 885-898, November.
    15. Zaporozhets, Vera & García-Valiñas, María & Kurz, Sascha, 2016. "Key drivers of EU budget allocation: Does power matter?," European Journal of Political Economy, Elsevier, vol. 43(C), pages 57-70.
    16. Maria Montero & Alex Possajennikov, 2021. "An Adaptive Model of Demand Adjustment in Weighted Majority Games," Games, MDPI, vol. 13(1), pages 1-17, December.
    17. Brânzei, R. & Tijs, S.H., 2001. "Additivity Regions for Solutions in Cooperative Game Theory," Discussion Paper 2001-81, Tilburg University, Center for Economic Research.
    18. Gerichhausen, M. & Berkhout, E.D. & Hamers, H.J.M. & Manyong, V.M., 2008. "A Game Theoretic Approach to Analyse Cooperation between Rural Households in Northern Nigeria," Discussion Paper 2008-62, Tilburg University, Center for Economic Research.
    19. Csóka, Péter, 2017. "Fair risk allocation in illiquid markets," Finance Research Letters, Elsevier, vol. 21(C), pages 228-234.
    20. Csercsik, Dávid & Hubert, Franz & Sziklai, Balázs R. & Kóczy, László Á., 2019. "Modeling transfer profits as externalities in a cooperative game-theoretic model of natural gas networks," Energy Economics, Elsevier, vol. 80(C), pages 355-365.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:4:p:1756-:d:1063765. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.