Fair Transmission Expansion Cost Allocation for Renewable Energy Resource Interconnection Based on Stochastic Cooperative Game Theory

We propose a fair transmission expansion cost allocation (CA) algorithm and a fair process to build alternative transmission expansion plans. We define fairness such that each participant’s payment does not exceed its own benefit and the total payment equals the total TEP cost. In our framework, excessive payments over generator benefits are minimized. Owners of renewable energy resources (RES)s can choose the point of interconnection via the CA algorithm; owners in the same interconnection queue may form an intermediate coalition to persuade owners of expensive bottleneck plans to change at reduced allocation cost. Fairness is implemented using stochastic cooperative game theory (SCGT); the fair CA is obtained by recursively minimizing the largest unfairness, which is the difference between payments and benefits, through coalitions. Benefits consider transmission usage, transmission-induced gains, and the variability of RESs and demand. We design spatially and temporally correlated RESs and demand scenarios using Gibbs sampling specialized for long-term interconnection studies, validate plausibility against a benchmark from the Global Probabilistic Mid-term Load Forecasting Competition 2017, and verify fairness by showing that entities with greater benefits pay larger costs.