Linear Programming Transportation Assignment Problem for Parametric Information-Decentralised Energy Market Model

A linear price-based transportation model for energy allocation in decentralised energy markets with multiple prosumers and consumers is studied. The centralised formulation minimizes the aggregate difference between generation costs and local consumer prices under supply and demand constraints. To model limited information and reduced coordination, a parametric decentralised variant is introduced, where consumers are clustered into K groups, and prices are averaged within K clusters. Consumer clustering is based on price similarity. The proposed approach treats decentralisation as a tunable structural parameter rather than a binary rule. Computational experiments across varying market sizes demonstrate that clustered configurations frequently outperform the fully individualized pricing regime in terms of the objective value, especially in unfavourable market conditions. A finding is the efficiency-versus-decentralisation relationship is non-monotonic, with an instance-dependent optimal number of clusters. The results suggest that controlled price aggregation can improve market outcomes while reducing informational and computational complexity.