Dynamic coalition formation in a smart grid: A game theoretic approach

In this paper, the problem of optimal energy distribution by dynamically changing the size of coalition, which consists of one micro-grid and several customers, is studied using the theory of Markov Decision Process (MDP) - a discrete optimization method. In this paper, the micro-grid, which acts as one of the players, needs to decide the size of the coalition for utilizing the generated energy optimally. On the other hand, the customer, which acts as another player, needs to decide its strategies, so as to optimize a trade-off between the associated cost, i.e., communication cost and energy distribution cost, and effective power supply. Using MDP, it is shown how dynamically coalition can be formed and the customer can be assured of an efficient power distribution.