HiFi-Gas: Hierarchical Federated Learning Incentive Mechanism Enhanced Gas Usage Estimation

Abstract

Gas usage estimation plays a critical role in various aspects of the power generation and delivery business, including budgeting, resource planning, and environmental preservation. Federated Learning (FL) has demonstrated its potential in enhancing the accuracy and reliability of gas usage estimation by enabling distributedly owned data to be leveraged, while ensuring privacy and confidentiality. However, to effectively motivate stakeholders to contribute their high-quality local data and computational resources for this purpose, incentive mechanism design is key. In this paper, we report our experience designing and deploying the Hierarchical FL Incentive mechanism for Gas usage estimation (HiFi-Gas) system. It is designed to cater to the unique structure of gas companies and their affiliated heating stations. HiFi-Gas provides effective incentivization in a hierarchical federated learning framework that consists of a horizontal federated learning (HFL) component for effective collaboration among gas companies and multiple vertical federated learning (VFL) components for the gas company and its affiliated heating stations. To motivate active participation and ensure fairness among gas companies and heating stations, we incorporate a multi-dimensional contribution-aware reward distribution function that considers both data quality and model contributions. Since its deployment in the ENN Group in December 2022, HiFi-Gas has successfully provided incentives for gas companies and heating stations to actively participate in FL training, resulting in more than 12% higher average gas usage estimation accuracy and substantial gas procurement cost savings. This implementation marks the first successful deployment of a hierarchical FL incentive approach in the energy industry.