The Generalized N&K Value: An Axiomatic Mechanism for Electricity Trading

Mark Alexander Burgess (Australian National University), Archie C. Chapman (University of Sydney), Paul Scott (Australian National University)

Abstract

We introduce an axiomatic solution concept for generalized noncooperative games called the generalized N&K value. It is applied as a mechanism for determining appropriate financial transfers over DC optimal power flow (DC-OPF) instances in an electrical network. The generalized N&K value rewards network participants in proportion to the competitive position of the coalitions that they could be part of. In this way it reflects the relative bargaining powers of the electrical network participants.