A Game Theoretic Approach for Demand-Side Management Using Real-Time Variable Peak Pricing Considering Distributed Energy Resources

The pricing scheme plays a vital role in the demand-side management program. It allows utility, indirect control over the users energy consumption. This article proposes a new pricing structure, named as a real-time variable peak pricing scheme with a self-inbuilt feature to capture the benefit of both the existing pricing scheme, real-time pricing (RTP), and time of use (TOU), by switching its behavior between RTP and TOU as per the requirements. A home energy management model with comprehensive modeling of home appliances together with distributed storage and dispatchable generation is considered for testing the impact of the proposed pricing scheme and compared to existing RTP and TOU. The privacy and comfort of users are taken care of in the system modeling. An aggregative game approach is used to capture the interaction between users and utility. The conditions for the existence of Nash equilibrium and convergence of the proposed algorithm is investigated for all three pricing schemes considering residential users. The analysis shows the effectiveness of the proposed pricing scheme compare to the existing pricing schemes in terms of consumers energy bill and system peak reduction, complexity, and incentive to active consumers to participate in demand-side management programs.

Automated summary

This article proposes a new pricing scheme that switches its behavior between real-time pricing and time of use, based on the demand, and tests its impact. The study analyzes the conditions for the existence of Nash equilibrium and convergence of three pricing schemes. The analysis shows that the proposed pricing scheme has advantages in reducing energy bills, peak reduction, complexity, and incentive for user participation.