Multi-agent Retail Energy Markets: Contract Negotiation, Customer Coalitions and a Real-World Case Study

The participants in energy markets (EMs) can purchase and sell electricity through a few basic instruments, notably spot markets and bilateral contracts. This work aims at using software agents to help manage the complexity of EMs. Specifically, this paper centers on contract negotiation between a single retailer and a coalition of end-use customers—that is, two or more customers ally into a coalition to strengthen their bargaining positions and obtain better tariffs. It extends our previous work on bilateral contracting and customer coalition by considering a different interaction process between a trusted coordinator agent and the coalition members (end-use customers). Also, it presents a case study involving three schools for children located in England. The schools decide to ally into a coalition and rely on a coordinator agent, who takes decisions according to either a “majority” decision rule (two of the customers must are in agreement) or an “unanimity” rule (all customers must are in agreement). Although preliminary, the results do suggest that the formation and management of coalitions during bilateral contracting of electricity is indeed beneficial to end-use customers.