Cooperative Relaying Strategies for Smart Grid Communications: Bargaining Models and Solutions

In smart grid, the frequency regulation can be provided by both the automatic generation control (AGC) and the demand-side regulation, and the regulation errors increase the electricity costs to the utility company. The demand-side regulation adopts a hierarchical communication architecture, and the data aggregator unit (DAU) may suffer from congestions which consequently increase the costs to the utility company for more AGC service except for the demand-side regulation. In this paper, we employed the base stations as relays and formulated the electricity costs-based upon the regulation errors and the packets loss model. Specifically, the utility company decides the relaying bandwidth to minimize its electricity costs, and the relay selects the base price to maximize its profits. The novelty of this paper is twofold. First, we formulate the interactions between the utility company and the relay as a bargaining problem. Second, we utilize the Nash bargaining solution (NBS) and Raiffa-Kalai-Smorodinsky (RBS) bargaining solution to achieve the Pareto-optimal outcome. Furthermore, we extended the results to the case with multiple DAUs and multiple relays. The numerical results demonstrate the cost reduction of the utility company and the profit increase of the relay under the NBS or RBS strategy. In addition, the NBS strategy can bring about more profits for the relay than the RBS strategy, while the RBS strategy can provide a fairer payoff allocation and lower costs to the utility company than the NBS strategy.