Congestion cost allocation method based on Aumann-Shapley value in bilateral model

In bilateral model, congestion relief cost should be allocated in an equitable manner among all market participants contributing to congestion. Unfortunately in the allocation of congestion relief cost to congested lines, which is the first step of cost allocation, the previously proposed shadow price method and the aggregated allocation method both have some shortcomings. To overcome these shortcomings, a cost allocation method based on the Aumann-Shapley value is proposed. By means of the Aumann-Shapley value, a solution concept in the cooperative game with infinitely many players, the proposed method takes all orders of relieving congestion on lines into consideration, thus guarantees equitable allocation of congestion relief cost to congested lines. In addition, the calculating procedure is both simple and accurate due to the use of the Gauss integration method. Test results show that this method can lead to better allocation than do the shadow price method and the aggregated allocation method.