Virtual Associations of Prosumers for Smart Energy Networks Under a Renewable Split Market

Feed-in-tariff (FIT) policies are currently employed to internalize the positive externalities of renewable energy sources (RESs). However, FIT is not time varying, failing to model the dynamics of the electricity market. Thus, the concept of the aggregator has been adopted to act as a mediator between the market and RES producers. In this paper, RES aggregation is performed through virtual associations (VAs), which are dynamic clusters of prosumers created through ICT. VAs support the prosumers' active participation in the market, the dynamic formation of the clusters to maximize prosumers' profit and participation, and the fair competition among the VAs and among the prosumers. A VA does not have to be a separate profit-seeking entity, and thus its interests can be perfectly aligned with those of the prosumers comprising it. The fair sharing scheme used favors the most competitive VAs and prosumers, without excluding less competitive ones from the market. Different algorithms to form VAs are examined based on a min-max optimization strategy and fair sharing. Fair sharing provides: 1) incentives to the VAs to increase their competitiveness; 2) increased prosumers' participation; and 3) dynamic interaction with the market. Experimental results obtained on realistic traces reveal the advantages of the proposed market models.