IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v306y2024ics0360544224020413.html
   My bibliography  Save this article

Trading mechanism for social welfare maximization in integrated electricity and heat systems with multiple self-interested stakeholders

Author

Listed:
  • Zheng, Weiye
  • Xu, Siyu
  • Lu, Hao
  • Wu, Wenchuan
  • Zhu, Jianquan

Abstract

Cooperation across multiple energy sectors is capable of maximizing social welfare as revealed by existing research, but such holistic dispatch can be hardly implemented in a reality where energy sectors are run by different stakeholders respectively. To fill this gap, energy trading among multiple self-interested stakeholders is investigated in this paper. To maximize the social welfare of the trading results, an effective pricing method, referred to as network-constrained generalized locational marginal prices, is proposed. A trading mechanism is then carefully designed to encourage stakeholders to trade at network-constrained generalized locational marginal prices, while economic properties of the resultant generalized Nash equilibrium are analyzed in depth. The effectiveness of the mechanism is validated in two integrated electricity and heat systems with different scales. Numerical comparison demonstrates that existing non-cooperative mechanisms may result in undesirable deadweight losses, while surplus sharing is a tricky issue in cooperative mechanisms, making the cooperation unstable and infeasible. On the contrary, each stakeholder may optimize its subsystem in a self-interested manner in the proposed mechanism, but the overall outcome strikingly coincides with social welfare maximization.

Suggested Citation

  • Zheng, Weiye & Xu, Siyu & Lu, Hao & Wu, Wenchuan & Zhu, Jianquan, 2024. "Trading mechanism for social welfare maximization in integrated electricity and heat systems with multiple self-interested stakeholders," Energy, Elsevier, vol. 306(C).
    • Handle: RePEc:eee:energy:v:306:y:2024:i:c:s0360544224020413
    DOI: 10.1016/j.energy.2024.132267
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544224020413
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2024.132267?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Liu, Xuezhi & Wu, Jianzhong & Jenkins, Nick & Bagdanavicius, Audrius, 2016. "Combined analysis of electricity and heat networks," Applied Energy, Elsevier, vol. 162(C), pages 1238-1250.
    2. Wang, Xuejie & zhao, Huiru & Lu, Hao & Zhang, Yuanyuan & Wang, Yuwei & Wang, Jingbo, 2022. "Decentralized coordinated operation model of VPP and P2H systems based on stochastic-bargaining game considering multiple uncertainties and carbon cost," Applied Energy, Elsevier, vol. 312(C).
    3. Wang, Xuejie & Li, Bingkang & Wang, Yuwei & Lu, Hao & Zhao, Huiru & Xue, Wanlei, 2022. "A bargaining game-based profit allocation method for the wind-hydrogen-storage combined system," Applied Energy, Elsevier, vol. 310(C).
    4. Zhu, Jizhong & Dong, Hanjiang & Zheng, Weiye & Li, Shenglin & Huang, Yanting & Xi, Lei, 2022. "Review and prospect of data-driven techniques for load forecasting in integrated energy systems," Applied Energy, Elsevier, vol. 321(C).
    5. Wang, Lu & Gu, Wei & Wu, Zhi & Qiu, Haifeng & Pan, Guangsheng, 2020. "Non-cooperative game-based multilateral contract transactions in power-heating integrated systems," Applied Energy, Elsevier, vol. 268(C).
    6. Zheng, Weiye & Lu, Hao & Zhu, Jizhong, 2023. "Incentivizing cooperative electricity-heat operation: A distributed asymmetric Nash bargaining mechanism," Energy, Elsevier, vol. 280(C).
    7. Gu, Wei & Wang, Jun & Lu, Shuai & Luo, Zhao & Wu, Chenyu, 2017. "Optimal operation for integrated energy system considering thermal inertia of district heating network and buildings," Applied Energy, Elsevier, vol. 199(C), pages 234-246.
    8. Zheng, Weiye & Xu, Siyu & Liu, Jiawei & Zhu, Jizhong & Luo, Qingju, 2023. "Participation of strategic district heating networks in electricity markets: An arbitrage mechanism and its equilibrium analysis," Applied Energy, Elsevier, vol. 350(C).
    9. Zhou, Kaile & Yang, Shanlin & Shao, Zhen, 2016. "Energy Internet: The business perspective," Applied Energy, Elsevier, vol. 178(C), pages 212-222.
    10. Zheng, Weiye & Hill, David J., 2021. "Incentive-based coordination mechanism for distributed operation of integrated electricity and heat systems," Applied Energy, Elsevier, vol. 285(C).
    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. Zheng, Weiye & Lu, Hao & Zhu, Jizhong, 2023. "Incentivizing cooperative electricity-heat operation: A distributed asymmetric Nash bargaining mechanism," Energy, Elsevier, vol. 280(C).
    2. Zheng, Weiye & Xu, Siyu & Liu, Jiawei & Zhu, Jizhong & Luo, Qingju, 2023. "Participation of strategic district heating networks in electricity markets: An arbitrage mechanism and its equilibrium analysis," Applied Energy, Elsevier, vol. 350(C).
    3. Zhang, Menglin & Wu, Qiuwei & Wen, Jinyu & Pan, Bo & Qi, Shiqiang, 2020. "Two-stage stochastic optimal operation of integrated electricity and heat system considering reserve of flexible devices and spatial-temporal correlation of wind power," Applied Energy, Elsevier, vol. 275(C).
    4. Zheng, Jinfu & Zhou, Zhigang & Zhao, Jianing & Wang, Jinda, 2018. "Effects of the operation regulation modes of district heating system on an integrated heat and power dispatch system for wind power integration," Applied Energy, Elsevier, vol. 230(C), pages 1126-1139.
    5. Zhang, Suhan & Gu, Wei & Lu, Hai & Qiu, Haifeng & Lu, Shuai & Wang, Dada & Liang, Junyu & Li, Wenyun, 2021. "Superposition-principle based decoupling method for energy flow calculation in district heating networks," Applied Energy, Elsevier, vol. 295(C).
    6. Zhang, Suhan & Gu, Wei & Qiu, Haifeng & Yao, Shuai & Pan, Guangsheng & Chen, Xiaogang, 2021. "State estimation models of district heating networks for integrated energy system considering incomplete measurements," Applied Energy, Elsevier, vol. 282(PA).
    7. Xu, Jiazhu & Yi, Yuqin, 2023. "Multi-microgrid low-carbon economy operation strategy considering both source and load uncertainty: A Nash bargaining approach," Energy, Elsevier, vol. 263(PB).
    8. Zheng, Jinfu & Zhou, Zhigang & Zhao, Jianing & Hu, Songtao & Wang, Jinda, 2021. "Effects of intermittent heating on an integrated heat and power dispatch system for wind power integration and corresponding operation regulation," Applied Energy, Elsevier, vol. 287(C).
    9. Wang, Dan & Zhi, Yun-qiang & Jia, Hong-jie & Hou, Kai & Zhang, Shen-xi & Du, Wei & Wang, Xu-dong & Fan, Meng-hua, 2019. "Optimal scheduling strategy of district integrated heat and power system with wind power and multiple energy stations considering thermal inertia of buildings under different heating regulation modes," Applied Energy, Elsevier, vol. 240(C), pages 341-358.
    10. Chen, Dongwen & Li, Yong & Abbas, Zulkarnain & Li, Dehong & Wang, Ruzhu, 2022. "Network flow calculation based on the directional nodal potential method for meshed heating networks," Energy, Elsevier, vol. 243(C).
    11. He, Ke-Lun & Zhao, Tian & Ma, Huan & Chen, Qun, 2023. "Optimal operation of integrated power and thermal systems for flexibility improvement based on evaluation and utilization of heat storage in district heating systems," Energy, Elsevier, vol. 274(C).
    12. Qu, Kaiping & Yu, Tao & Huang, Linni & Yang, Bo & Zhang, Xiaoshun, 2018. "Decentralized optimal multi-energy flow of large-scale integrated energy systems in a carbon trading market," Energy, Elsevier, vol. 149(C), pages 779-791.
    13. Shen, Lu & Dou, Xiaobo & Long, Huan & Li, Chen & Chen, Kang & Zhou, Ji, 2021. "A collaborative voltage optimization utilizing flexibility of community heating systems for high PV penetration," Energy, Elsevier, vol. 232(C).
    14. Kuntuarova, Saltanat & Licklederer, Thomas & Huynh, Thanh & Zinsmeister, Daniel & Hamacher, Thomas & Perić, Vedran, 2024. "Design and simulation of district heating networks: A review of modeling approaches and tools," Energy, Elsevier, vol. 305(C).
    15. Frölke, Linde & Sousa, Tiago & Pinson, Pierre, 2022. "A network-aware market mechanism for decentralized district heating systems," Applied Energy, Elsevier, vol. 306(PA).
    16. Zhang, Menglin & Wu, Qiuwei & Wen, Jinyu & Lin, Zhongwei & Fang, Fang & Chen, Qun, 2021. "Optimal operation of integrated electricity and heat system: A review of modeling and solution methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    17. Bao, Zhejing & Ye, Yangli & Liu, Ruijie & Cheng, Weidong & Zhao, Qiang & Wu, Ting, 2022. "Scheduling coordination of back pressure CHP coupled electricity-heat energy system with adaptive constraint strategy to accommodate uncertain wind power," Energy, Elsevier, vol. 240(C).
    18. Chunyi Wang & Fengzhang Luo & Zheng Jiao & Xiaolei Zhang & Zhipeng Lu & Yanshuo Wang & Ren Zhao & Yang Yang, 2022. "An Enhanced Second-Order Cone Programming-Based Evaluation Method on Maximum Hosting Capacity of Solar Energy in Distribution Systems with Integrated Energy," Energies, MDPI, vol. 15(23), pages 1-19, November.
    19. Han, Fengwu & Zeng, Jianfeng & Lin, Junjie & Zhao, Yunlong & Gao, Chong, 2023. "A stochastic hierarchical optimization and revenue allocation approach for multi-regional integrated energy systems based on cooperative games," Applied Energy, Elsevier, vol. 350(C).
    20. Qin, Xin & Sun, Hongbin & Shen, Xinwei & Guo, Ye & Guo, Qinglai & Xia, Tian, 2019. "A generalized quasi-dynamic model for electric-heat coupling integrated energy system with distributed energy resources," Applied Energy, Elsevier, vol. 251(C), pages 1-1.

    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:eee:energy:v:306:y:2024:i:c:s0360544224020413. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    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.