Fair Cost Allocation in Energy Communities Under Forecast Uncertainty

Abstract

Energy communities (ECs) are an increasingly studied path toward improving prosumer coordination. A central challenge of ECs is to allocate cost savings fairly to members. While many allocation mechanisms have been developed, existing literature does not account for the implications of inaccurate forecasts on the fairness of the allocation. We introduce a set of fairness conditions for imperfect knowledge allocation and show that these conditions constitute a Pareto front. We demonstrate how a well-established allocation scheme, the Shapley value mechanism (SVM), has unfavorable consequences for flexibility-providing community members and generally does not yield solutions on this Pareto front. In contrast, we interpret dispatch cost under imperfect knowledge as being composed of two components. The first represents the cost under perfect knowledge, and the second represents the cost arising from inaccurate forecasts. Our proposed mechanism extends an SVM-based allocation of the perfect knowledge cost by allocating the remaining cost in a way that guarantees finding solutions on the Pareto front. To this end, we formulate a convex multi-objective optimization problem that can efficiently be solved as a linear or quadratic program.

Keywords

• Energy community
• cost allocation
• fairness
• forecast uncertainty
• Shapley value
• Pareto optimality