Analytically Quantifying the Efficiency Loss in Competitive Aggregation of Demand-Side Resources

Aggregation of demand-side resources (DSRs) to load aggregators (LAs) is a prevailing way to participate in the electricity market. This letter proposes an analytical approach to quantify the efficiency loss inherent in the competitive aggregation of DSRs by calculating the price of anarchy (PoA) via linear programming (LP). First, the equivalent Nash equilibrium condition for competitive aggregation is derived. Then, the LP problem for PoA calculation is formulated by leveraging parameterization and dual reformulation. Finally, applications on a demonstrative case and a series of large-scale cases are conducted to validate the effectiveness and scalability of the proposed method.