Demand side management of smart grid: Load shifting and incentives

This paper presents a load shifting algorithm for optimizing consumption patterns by taking preferences of customers and electricity costs into account. A load shifting cost component is introduced for recording inconvenience experienced by customers while load shifting. Load shifting cost reflects the reluctance of customers for their inconvenience where the customers are unique in terms of their preferences and costs. The proposed algorithm would allow demand side management to be conducted in a decentralized manner, where no problem of load synchronization exists. Multi-agent system based simulation studies were carried out on three types of customers namely, residential, commercial, and industrial customers to verify this algorithm. The simulation results show that substantial load levelling is achieved by the proposed algorithm. This study is further extended to examine the effects of incentives that encourage customers to participate in load shifting. However, this does not lead to a better load levelling perhaps due to the small sample sized simulation systems. Instead, incentives could be used as a short-term measure for customers to know that how the mechanism would work for them. (C) 2014 AIP Publishing LLC.