Barter contracts in intertemporal energy exchange

We consider intertemporal energy exchange between independent power companies. The incentive for the exchange comes from the diversity in the time variation of the marginal production costs so that there are differences in the relative marginal production costs between the companies. The exchange is accomplished through a barter contract. We present a model for the energy exchange and use a game-theoretic approach to solve the bargaining problem between the power companies. Possible fairness properties of the cost allocation are discussed. We present examples of barter contracts that are based on the Nash bargaining solution.