Cost allocation strategies for wide-area control of power systems using Nash Bargaining Solution

In this paper we present a novel game-theoretic strategy that guarantees fair cost allocation incurred by communication links in wide-area control for electric power systems. The underlying transmission network topology results in vastly diverse requirements for inter-area feedback for operating areas owned by different utility companies. Thus, it is unfair to divide the total communication cost equally among all companies. Our objective is to quantify these requirements and incorporate them into a fair cost distribution scheme. We formulate the wide-area control problem as a state-feedback based LQR minimization problem and cast it as a cooperative game with companies acting as game-players. We first apply sparsity-promoting optimization algorithms to construct the feedback gain matrix such that its off-diagonal blocks that characterize the inter-area feedback are as sparse as possible under a desired energy constraint. Assigning a fixed cost to every non-zero element in these off-diagonal blocks, we apply the Nash Bargaining Solution (NBS) to fairly allocate the total cost among the various game-players. Resulting insights into the wide-area communication requirements for different areas over a range of energy constraints are discussed.