Fairness of Sharing Renewable Energy Between Prosumers

In recent years, a growing number of prosumers are beginning to form coalitions to jointly invest in renewable energy projects and share energy among themselves, either through peer-to-peer markets or collective self-consumption. The aim of this paper is to evaluate the fairness of three methods that can be used to financially settle the energy sharing between prosumers engaged in collective self-consumption. Two of the methods, the Shapley value and MinVar, are well-known and widely used in the literature on energy sharing, while the third method, called Virtual Net-Billing, is presented as an alternative and is the focus of this paper. The fairness is evaluated using distributive justice theory and is assessed based on two indicators, Jain’s index J and the fairness index F. For the purposes of this assessment, 100 hypothetical coalitions of different sizes are formed and the fairness indicators are calculated for each of the three energy sharing methods. It is found that the Virtual Net-Billing method yields the greatest payoff equality while having a meritocratic formulation, which should ensure minimized envy among coalition members. Along with this advantage, it is argued that, due to its compact and rule-based formulation, Virtual Net-Billing is well-suited for real-world use even in coalitions containing many prosumers.