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The sharing economy has upset the market for housing and transportation services. Homeowners can rent out their property when they are away on vacation, car owners can offer ridesharing services. These sharing economy business models are based on monetizing under-utilized infrastructure. They are enabled by peer-to-peer platforms that match eager sellers with willing buyers. Are there compelling sharing economy opportunities in the electricity sector? What products or services can be shared in tomorrow’s Smart Grid? We begin by exploring sharing economy opportunities in the electricity sector, and discuss regulatory and technical obstacles to these opportunities. We then study the specific problem of a collection of firms sharing their electricity storage. We characterize equilibrium prices for shared storage in a spot market. We formulate storage investment decisions of the firms as a non-convex non-cooperative game. We show that under a mild alignment condition, a Nash equilibrium exists, it is unique, and it supports the social welfare. We discuss technology platforms necessary for the physical exchange of power, and market platforms necessary to trade electricity storage. We close with synthetic examples to illustrate our ideas.
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The Sharing Economy for Residential Solar Generation
This paper studies rooftop solar photovoltaic (PV) investment decisions of households. Two cases are considered: (a) the status quo of net-metering, and (b) a new sharing economy model. Under net-metering, households can sell back their excess generation to the utility at their retail tariff subject to the prevalent constraint that they cannot be net producers of electricity on an annual basis. In our sharing economy model, households can pool their excess PV generation and trade it in a spot market among themselves, but the collective cannot sell electricity back to the utility. Our objective in studying these two cases is that net-metering programs are under threat and being phased out, which places future residential PV investment at risk. In the event of this contingency, we argue that the sharing economy model offers a pathway to preserve and even accelerate residential PV investment. We derive expressions for the optimal investment decisions in each case assuming that households are rational and wish to minimize their costs. We characterize the random clearing price in the spot market for excess PV generation under the sharing model. We show that the optimal investment decisions are determined by a simple threshold policy. Households whose PV productivity metric exceeds this threshold invest the maximum possible, while those that fall below the threshold do not invest. We offer a convergent algorithm to compute this threshold. We close with a small-scale simulation study that reveals the favorable properties of the sharing economy model for residential PV investments.
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- Award ID(s):
- 1646612
- PAR ID:
- 10122695
- Date Published:
- Journal Name:
- IEEE Conference on Decision and Control Miami
- Page Range / eLocation ID:
- 7322 to 7329
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Conference Paper:
- https://doi.org/10.1109/CDC.2018.8619671
