A Market Mechanism for Energy Allocation in Micro-CHP Grids

Achieving a sustainable level of energy production and consumption is one of the major challenges in our society. This paper contributes to the objective of increasing energy efficiency by introducing a market mechanism that facilitates the efficient matching of energy (i.e. electricity and heat) demand and supply in micro energy grids. More precisely we propose a combinatorial double auction mechanism for the allocation and pricing of energy resources that especially takes the specific requirements of energy producers and consumers into account. We describe the potential role of decentralized micro energy grids and their coupling to the large scale power grid. Furthermore we introduce an emergency fail over procedure that keeps the micro energy grid stable even in cases where the auction mechanism fails. As the underlying energy allocation problem itself is NP-hard, we derive a fast heuristic for finding efficient supply and demand allocations. In addition we show the applicability of this approach through numerica.