Application of Cooperative Game Theory to Benefit Allocation of Interruptible Load Management

In the deregulated power systems, the interruptible load management (ILM) is widely used as an effective measure to ensure reliability and mitigate the market price spike. A critical issue is the incentive paid to the consumers to participate in the ILM. This paper addresses the quantification and allocation of ILM's benefit from mitigating the wholesale price spike. This benefit is calculated within a probabilistic framework that takes into account uncertainties in generating units' availabilities and load demand forecasting. The Shapley value in cooperative game theory is applied to allocate the benefit among the participants of ILM. These allocated benefits will play an important role in designing the incentive payment to the interruptible consumers. Numerical examples are presented to validate the reasonableness and effectiveness of the proposed method.