Aggregate Demand-Based Real-Time Pricing Mechanism for the Smart Grid: A Game-Theoretic Analysis

Bandyopadhyay, Sambaran; Narayanam, Ramasuri; Kota, Ramachandra; Petra, Pg Mohammad Iskandarbin Pg Hj; Charbiwala, Zainul

Aggregate Demand-Based Real-Time Pricing Mechanism for the Smart Grid: A Game-Theoretic Analysis

Sambaran Bandyopadhyay, Ramasuri Narayanam, Ramachandra Kota, Pg Mohammad Iskandarbin Pg Hj Petra, Zainul Charbiwala

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Proceedings of the Twenty-Fourth International Joint Conference on Artificial Intelligence. Special Track on Computational Sustainability. Pages 2554-2559.

Abstract

Managing peak energy demand is a critical problem for energy utilities. The energy costs for the peak periods form a major component of their overall costs. Real-time pricing mechanisms have been explored as a means of flattening the demand curve and reducing the energy costs. In this paper, we examine a model of ex-post real-time pricing mechanism that can be used by the utilities for this purpose. In particular, we study a convex piecewise linear cost function that modulates the price of energy based on the aggregate demand of the utility. We provide a game-theoretic analysis of the mechanism by constructing a non-cooperative game among the consumers of a utility wherein the cost to each consumer is decided by the pricing mechanism. We formally characterize the Nash equilibrium and other properties for two settings: (i) consumers have full flexibility in shifting their demand, and (ii) consumers can shift only a fraction of their demand at any time to another time.

Sambaran Bandyopadhyay, Ramasuri Narayanam, Ramachandra Kota, Pg Mohammad Iskandarbin Pg Hj Petra, and Zainul Charbiwala. 2015. Aggregate Demand-Based Real-Time Pricing Mechanism for the Smart Grid: A Game-Theoretic Analysis. In Proceedings of the Twenty-Fourth International Joint Conference on Artificial Intelligence, IJCAI-15. IJCAI, 2554–2559. https://ijcai.org/proceedings/2015/362

@inproceedings{ijcai2015p362,
  title     = {Aggregate Demand-Based Real-Time Pricing Mechanism for the Smart Grid: A Game-Theoretic Analysis},
  author    = {Bandyopadhyay, Sambaran and Narayanam, Ramasuri and Kota, Ramachandra and Petra, Pg Mohammad Iskandarbin Pg Hj and Charbiwala, Zainul},
  booktitle = {Proceedings of the Twenty-Fourth International Joint Conference on
               Artificial Intelligence, {IJCAI-15}},
  publisher = {International Joint Conferences on Artificial Intelligence},
  editor    = {Qiang Yang and Michael Wooldridge},
  pages     = {2554--2559},
  year      = {2015},
  month     = {7},
  note      = {Special Track on Computational Sustainability},
  url       = {https://ijcai.org/proceedings/2015/362},
}

TY  - CPAPER
TI  - Aggregate Demand-Based Real-Time Pricing Mechanism for the Smart Grid: A Game-Theoretic Analysis
AU  - Bandyopadhyay, Sambaran
AU  - Narayanam, Ramasuri
AU  - Kota, Ramachandra
AU  - Petra, Pg Mohammad Iskandarbin Pg Hj
AU  - Charbiwala, Zainul
T2  - Proceedings of the Twenty-Fourth International Joint Conference on Artificial Intelligence, IJCAI-15
PB  - International Joint Conferences on Artificial Intelligence
PY  - 2015
SP  - 2554
EP  - 2559
UR  - https://ijcai.org/proceedings/2015/362
ER  -