A Simple Payoff Allocation Mechanism Achieves Efficiency And Stability In Renewable Energy Aggregation

Problem setting: To encourage renewable power producers to participate in an aggregation we need to design aggregation mechanisms that are simple and yet guarantee desirable properties. In this paper we propose a simple payment mechanism for such aggregation that:

• Achieves social optimality, guranteeing optimilaity of the performance of the aggregator.
• It supports group rationality, meaning that no subset of RPPs are incentivized to leave the coalition.
• It guarantees no collusion, meaning that collusion within the grand coalition does not benefit members.
• budget balance

To see the pdf of the paper, see link.