Analysis of a cooperative and coalition formation game model among energy consumers in the Smart Grid

Emphasizing customer control and promoting an active and participatory role for the energy consumers are among the main facets of the future Smart Grid. Existing studies are to a great extent focus on energy saving mechanisms of individual customers, independently, from other energy consumers. This paper considers cooperative and coalition formation games among consumers in the Smart Grid. Our model is based on multi-agent systems. The agents in our model act on behalf of residential consumers through techniques such as domestic energy controllers or the smart meters which are available for end-users in the Smart Grid. In this paper, we analyze agents' cooperation and coalitions formations under an economy with externalities where the cooperative possibilities of a coalition are derived from equilibrium points of an associated non-cooperative game. In particular, we discuss the optimal division of the agents' payoff under the concept of games in partition function form. We show that this concept enables the agents to self-organize into stable partition composed of coalitions of agents.