Optimal Electricity Storage Sharing Mechanism for Single Peaked Time-of-Use Pricing Scheme

Abstract

Sharing economy has disrupted many industries. We foresee that electricity storage systems could be the enabler for sharing economy in electricity sector, though its implementation is a delicate task. Unlike in the 2tier Time-of-Use (ToU) pricing, where greedy arbitrage policy can achieve the maximal electricity bill savings, most existing ToU schemes consist of multiple tiers, which renders the arbitrage challenging. The difficulty comes from the hedging against multiple tiers and the coupling between the decisions across the day. In this work, we focus on designing the energy sharing mechanism for single peaked ToU scheme. To solve the problem, we identify that it suffices to understand the arbitrage policies for two forms of 3-tier ToU schemes. We submit that under mild conditions, the sharing mechanism yields a unique equilibrium, which supports the maximal social welfare.