The increasing use of renewable energy sources with variable output, such as solar photovoltaic and wind power generation, calls for Smart Grids that effectively manage flexible loads and energy storage. The ability to forecast consumption at different locations in distribution systems will be a key capability of Smart Grids. The goal of this paper is to benchmark state-of-the-art methods for forecasting electricity demand on the household level across different granularities and time scales in an explorative way, thereby revealing potential shortcomings and find promising directions for future research in this area. We apply a number of forecasting methods including ARIMA, neural networks, and exponential smoothening using several strategies for training data selection, in particular day type and sliding window based strategies. We consider forecasting horizons ranging between 15 minutes and 24 hours. Our evaluation is based on two data sets containing the power usage of individual appliances at second time granularity collected over the course of several months. The results indicate that forecasting accuracy varies significantly depending on the choice of forecasting methods strategy and the parameter configuration. Measured by the Mean Absolute Percentage Error (MAPE), the considered state-of-the-art forecasting methods rarely beat corresponding persistence forecasts. Overall, we observed MAPEs in the range between 5 and >100 . The average MAPE for the first data set was 30 , while it was 85 for the other data set. These results show big room for improvement. Based on the identified trends and experiences from our experiments, we contribute a detailed discussion of promising future research.
The approaches for demand side management focus on different levels of the power system. On the grid operator level, studies focus for example on the minimization of power flow fluctuations @cite_17 or the integration of renewable energy @cite_13 . The distribution grid operator uses consumption forecasts to balance grids with a high penetration of decentralized generation of renewable energy (e.g., @cite_30 , @cite_14 ). Other studies look at the level of groups of consumers with a focus on game theoretic frameworks @cite_27 or virtual price signals @cite_6 . Most work on demand response, however, focuses on the level of end consumers. Recent research has studied the use of variable price signals for individual customers. These dynamic tariffs penalize consumption during certain periods of time with increased electricity prices, so that customers can respond by adjusting their consumption (e.g., @cite_8 , @cite_7 ). However, @cite_1 points out that demand side management with variable price signals can cause instabilities through load synchronization. To avoid uncontrolled behavior, accurate consumption forecasts can help utilities to select customers that are most suitable for a demand response program.
@cite_30 @cite_14 @cite_7 @cite_8 @cite_1 @cite_6 @cite_27 @cite_13 @cite_17
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Demand side management will be a key component of future smart grid that can help reduce peak load and adapt elastic demand to fluctuating generations. In this paper, we consider households that operate different appliances including PHEVs and batteries and propose a demand response approach based on utility maximization. Each appliance provides a certain benefit depending on the pattern or volume of power it consumes. Each household wishes to optimally schedule its power consumption so as to maximize its individual net benefit subject to various consumption and power flow constraints. We show that there exist time-varying prices that can align individual optimality with social optimality, i.e., under such prices, when the households selfishly optimize their own benefits, they automatically also maximize the social welfare. The utility company can thus use dynamic pricing to coordinate demand responses to the benefit of the overall system. We propose a distributed algorithm for the utility company and the customers to jointly compute this optimal prices and demand schedules. Finally, we present simulation results that illustrate several interesting properties of the proposed scheme. Most of the existing demand-side management programs focus primarily on the interactions between a utility company and its customers users. In this paper, we present an autonomous and distributed demand-side energy management system among users that takes advantage of a two-way digital communication infrastructure which is envisioned in the future smart grid. We use game theory and formulate an energy consumption scheduling game, where the players are the users and their strategies are the daily schedules of their household appliances and loads. It is assumed that the utility company can adopt adequate pricing tariffs that differentiate the energy usage in time and level. We show that for a common scenario, with a single utility company serving multiple customers, the global optimal performance in terms of minimizing the energy costs is achieved at the Nash equilibrium of the formulated energy consumption scheduling game. The proposed distributed demand-side energy management strategy requires each user to simply apply its best response strategy to the current total load and tariffs in the power distribution system. The users can maintain privacy and do not need to reveal the details on their energy consumption schedules to other users. We also show that users will have the incentives to participate in the energy consumption scheduling game and subscribing to such services. Simulation results confirm that the proposed approach can reduce the peak-to-average ratio of the total energy demand, the total energy costs, as well as each user's individual daily electricity charges. Demand-side management (DSM) is a key solution for reducing the peak-time power consumption in smart grids. To provide incentives for consumers to shift their consumption to off- peak times, the utility company charges consumers the differential pricing for using power at different times of the day. Consumers take into account these differential prices when deciding when and how much power to consume daily. Importantly, while consumers enjoy lower billing costs when shifting their power usage to off- peak times, they also incur discomfort costs due to the altering of their power consumption patterns. Existing works propose stationary strategies for the myopic consumers to minimize their short-term billing and discomfort costs. In contrast, we model the interaction emerging among self-interested and foresighted consumers as a repeated energy scheduling game and prove that the stationary strategies are suboptimal in terms of long-term total billing and discomfort costs. Subsequently, we propose a novel framework for determining optimal nonstationary DSM strategies, in which consumers can choose different daily power consumption patterns depending on their preferences, routines, and needs. As a direct consequence of the nonstationary DSM policy, different subsets of consumers are allowed to use power in peak times at a low price. The subset of consumers that are selected daily to have their joint discomfort and billing costs minimized is determined based on the consumers power consumption preferences as well as on the past history of which consumers have shifted their usage previously. Importantly, we show that the proposed strategies are incentive compatible. Simulations confirm that, given the same peak-to-average ratio, the proposed strategy can reduce the total cost (billing and discomfort costs) by up to 50 compared to existing DSM strategies. Demand-side management in smart grids has emerged as a hot topic for optimizing energy consumption. In conventional research works, energy consumption is optimized from the perspective of either the users or the power company. In this paper, we investigate how energy consumption may be optimized by taking into consideration the interaction between both parties. We propose a new energy price model as a function of total energy consumption. Also, we propose a new objective function, which optimizes the difference between the value and cost of energy. The power supplier pulls consumers in a round-robin fashion and provides them with energy price parameter and current consumption summary vector. Each user then optimizes his own schedule and reports it to the supplier, which, in turn, updates its energy price parameter before pulling the next consumers. This interaction between the power company and its consumers is modeled through a two-step centralized game, based on which we propose our game-theoretic energy schedule (GTES) method. The objective of our GTES method is to reduce the peak-to-average power ratio by optimizing the users' energy schedules. The performance of the GTES approach is evaluated through computer-based simulations. Demand-side energy management improves robustness and efficiency in Smart Grids. Load-adjustment and load-shifting are performed to match demand to available supply. These operations come at a discomfort cost for consumers as their lifestyle is influenced when they adjust or shift in time their demand. Performance of demand-side energy management mainly concerns how robustness is maximized or discomfort is minimized. However, measuring and controlling the distribution of discomfort as perceived between different consumers provides an enriched notion of fairness in demand-side energy management that is missing in current approaches. This paper defines unfairness in demand-side energy management and shows how unfairness is measurable and controllable by software agents that plan energy demand in a decentralized fashion. Experimental evaluation using real demand and survey data from two operational Smart Grid projects confirms these findings. © 2014 IEEE. While electric vehicles (EVs) are expected to provide environmental and economical benefit, judicious coordination of EV charging is necessary to prevent overloading of the distribution grid. Leveraging the smart grid infrastructure, the utility company can adjust the electricity price intelligently for individual customers to elicit desirable load curves. In this context, this paper addresses the problem of predicting the EV charging behavior of the consumers at different prices, which is a prerequisite for optimal price adjustment. The dependencies on price responsiveness among consumers are captured by a conditional random field (CRF) model. To account for temporal dynamics potentially in a strategic setting, the framework of online convex optimization is adopted to develop an efficient online algorithm for tracking the CRF parameters. The proposed model is then used as an input to a stochastic profit maximization module for real-time price setting. Numerical tests using simulated and semi-real data verify the effectiveness of the proposed approach. Recently issued U.S. Federal Energy Regulatory Commission regulations require comparable treatment of demand reduction and generation in the wholesale electric market so that they are compensated at the same market clearing price. The new regulations measure demand reduction as a reduction from a “customer baseline,” a historically based estimate of the expected consumption. In this paper, we study the incentive effects on the efficiency of the demand response regulation using a static equilibrium model and a dynamic extension of the model. Our analysis provides three main results. Firstly, our analysis shows that the demand reduction payment will induce consumers to (1) inflate the customer baseline by increasing consumption above the already excessive level during normal peak periods and (2) exaggerate demand reduction by decreasing consumption beyond the efficient level during a demand response event. This result persists when applied to alternative baseline designs in a dynamic model. Secondly, we study alternative policy remedies to restore the efficiency of demand response regulation and introduce a new approach to define the customer baseline as a fixed proportion of an aggregate baseline. In particular, the aggregate baseline approach can significantly weaken or eliminate the incentive to inflate the baseline. Finally, we illustrate that if the baseline inflation problem is solved and demand and supply functions are linear, the current policy can produce a net social welfare gain. However, the welfare improvement requires that demand reduction be paid only when the wholesale price is at least twice the fixed retail rate. This argues that the policy should include a sufficiently high threshold price below which demand response is not dispatched. Demand response aims at utilizing flexible loads to operate power systems in an economically efficient way. A fundamental question in demand response is how to conduct a baseline estimation to deal with increasing uncertainties in power systems. Unfortunately, traditional baseline estimation lacks the ability to characterize uncertainties due to their deterministic modeling. This deficiency often results in erroneous system operations and miscalculated payments that discourage participating customers. In this paper, we propose a Gaussian process-based approach to mitigate the problem. It features the ability to use all historical data as a prior knowledge, and adjust the estimation according to similar daily patterns in the past. To characterize the uncertainties, this method provides a probabilistic estimate that can be used to not only increase estimation confidence for system operators but also to fairer treatment to customers. Finally, simulation results from Pacific Gas and Electric Company data show that this new method can produce a highly accurate estimate, which dramatically reduces the uncertainties inherent in the distribution power grid. Such a work opens the door for power system operation based on probabilistic estimate. Demand-side management (DSM) has emerged as an important smart grid feature that allows utility companies to maintain desirable grid loads. However, the success of DSM is contingent on active customer participation. Indeed, most existing DSM studies are based on game-theoretic models that assume customers will act rationally and will voluntarily participate in DSM. In contrast, in this paper, the impact of customers’ subjective behavior on each other’s DSM decisions is explicitly accounted for. In particular, a noncooperative game is formulated between grid customers in which each customer can decide on whether to participate in DSM or not. In this game, customers seek to minimize a cost function that reflects their total payment for electricity. Unlike classical game-theoretic DSM studies, which assume that customers are rational in their decision-making, a novel approach is proposed based on the framework of prospect theory (PT) to explicitly incorporate the impact of customer behavior on DSM decisions. To solve the proposed game under both conventional game theory and PT, a new algorithm based on fictitious play is proposed using which the game will reach an @math -mixed Nash equilibrium. Simulation results are provided to assess the impact of customer behavior on DSM. In particular, the overall participation level and grid load can depend significantly on the rationality level of the players and their risk aversion tendencies. Response of demand, distributed generation and electricity storage (e.g. vehicle to grid) will be crucial for power systems management in the future smart electricity grid. Currently, demand response approaches are predominantly based on one-way signalling from the utility to the end-customer's devices and installations. However, this approach leads to a suboptimal solution as it does not unlock the full flexibility potential of these devices. On top of that, it leads to market inefficiencies and uncertainty in the price response of end-customer's demand and supply units when applied on a mass scale. These drawbacks are not present when the responsive end-customer's systems are fully integrated in the electricity markets. In this paper, we describe a smart grid technology that integrates demand and supply flexibility in the operation of the electricity system, rather than just letting it respond. Over the last few years, this technology has been researched and developed into a market-ready system, and has been deployed in a number of successful field trials. Using this approach, the pool reaction to a certain price signal is known beforehand. With that, demand response moves from influencing, with an uncertain overall response, into control with the dynamic price as a control signal. This paper mainly focuses on demand side management and demand response, including drivers and benefits, shiftable load scheduling methods and peak shaving techniques. Demand side management techniques found in literature are overviewed and a novel electricity demand control technique using real-time pricing is proposed. Currently users have no means to change their power consumption to benefit the whole system. The proposed method consists of modern system identification and control that would enable user side load control. This would potentially balance demand side with supply side more effectively and would also reduce peak demand and make the whole system more efficient. In this paper, we study Demand Response (DR) problematics for different levels of information sharing in a smart grid. We propose a dynamic pricing scheme incentivizing consumers to achieve an aggregate load profile suitable for utilities, and study how close they can get to an ideal flat profile depending on how much information they share. When customers can share all their load profiles, we provide a distributed algorithm, set up as a cooperative game between consumers, which significantly reduces the total cost and peak-to-average ratio (PAR) of the system. In the absence of full information sharing (for reasons of privacy), when users have only access to the instantaneous total load on the grid, we provide distributed stochastic strategies that successfully exploit this information to improve the overall load profile. Simulation results confirm that these solutions efficiently benefit from information sharing within the grid and reduce both the total cost and PAR. Significant changes in the power generation mix are posing new challenges for the balancing systems of the grid. Many of these challenges are in the secondary electricity grid regulation services and could be met through demand response (DR) services. We explore the opportunities for a water distribution system (WDS) to provide balancing services with demand response through pump scheduling and evaluate the associated benefits. Using a benchmark network and demand response mechanisms available in the UK, these benefits are assessed in terms of reduced green house gas (GHG) emissions from the grid due to the displacement of more polluting power sources and additional revenues for water utilities. The optimal pump scheduling problem is formulated as a mixed-integer optimisation problem and solved using a branch and bound algorithm. This new formulation finds the optimal level of power capacity to commit to the provision of demand response for a range of reserve energy provision and frequency response schemes offered in the UK. For the first time we show that DR from WDS can offer financial benefits to WDS operators while providing response energy to the grid with less greenhouse gas emissions than competing reserve energy technologies. Using a Monte Carlo simulation based on data from 2014, we demonstrate that the cost of providing the storage energy is less than the financial compensation available for the equivalent energy supply. The GHG emissions from the demand response provision from a WDS are also shown to be smaller than those of contemporary competing technologies such as open cycle gas turbines. The demand response services considered vary in their response time and duration as well as commitment requirements. The financial viability of a demand response service committed continuously is shown to be strongly dependent on the utilisation of the pumps and the electricity tariffs used by water utilities. Through the analysis of range of water demand scenarios and financial incentives using real market data, we demonstrate how a WDS can participate in a demand response scheme and generate financial gains and environmental benefits. This paper summarizes the results from an exploratory analysis of residential customer response to a critical peak pricing (CPP) experiment in California, in which 15 times per year participating customers received high price signals dispatched by a local electricity distribution company. The high prices were about three times the on-peak price for the otherwise applicable time-of-use rate. Using hourly load data collected during the 15-month experiment, we find statistically significant load reduction for participants both with and without automated end-use control technologies. During 5-h critical peak periods, participants without control technology used up to 13 less energy than they did during normal peak periods. Participants equipped with programmable communicating thermostats used 25 and 41 less for 5 and 2h critical events, respectively. Thus, this paper offers convincing evidence that the residential sector can provide substantial contributions to retail demand response, which is considered a potential tool for mitigating market power, stabilizing wholesale market prices, managing system reliability, and maintaining system resource adequacy. Demand response on the residential market is becoming a solution to adapt customer consumption to the offer available and therefore lower the electricity peak prices. Tariff incentives and direct load control of residential air-conditioners and electric heaters are flexible solutions to reduce the peak demand. To include residential demand response resources in planning operators, quantifying the demand reduction is becoming a major issue for all electrical stakeholders. Current methods are based on day or weather matching, regressions and control group approaches. In general, methods using available data from a control group give more accurate results. With the introduction of smart meters, the electric utilities generate a large amount of quality data, available almost in real time. In this paper, we suggest using these available residential load curves to select a control group based on individual load curves. One of the advantages of our method is that the selected control group could adapt at anytime to the number of individuals belonging to the demand reduction program, as this number evolves with customers entering and leaving the program. Constrained regression methods and an algorithm are developed and evaluated on real data, providing a reliable solution for an operational use. Real-time price setting strategies are investigated for use by demand response programs in future power grids. The major challenge is that consumers have varying degrees of responsiveness to price adjustments at different time instants, which must be learned and accounted for by demand response initiatives. To this end, an online learning approach is developed here offering strong performance guarantees with minimal assumptions on the dynamics of load levels and consumer elasticity, even when consumers are adversarial and take actions strategically. The developed algorithms can determine electricity prices sequentially so as to elicit desirable usage behavior and flatten load curves, while implicitly learning individual consumers’ price elasticity based on available feedback information. Two feedback structures are considered: 1) a full information setup, where aggregate load levels as well as individual price elasticity parameters are directly available, and 2) a partial information (bandit) case, where only the aggregate load levels are revealed. Fairness and sparsity constraints are also incorporated via appropriate regularizers. Numerical tests verify the effectiveness of the proposed approach. We design an optimal contract between a demand response aggregator (DRA) and power grid customers for incentive-based demand response. We consider a setting in which the customers are asked to reduce their electricity consumption by the DRA and they are compensated for this demand curtailment. However, given that the DRA must supply every customer with as much power as she desires, a strategic customer can temporarily increase her base load in order to report a larger reduction as part of the demand response event. The DRA wishes to incentivize the customers both to make costly effort to reduce load and to not falsify the reported load reduction. We model this problem as a contract design problem and present a solution. The proposed contract consists of two parts: a part that depends on (the possibly inflated) load reduction as measured by the DRA and another that provides a share of the profit that accrues to the DRA through the demand response event to the customers. Since this profit accrues due to the total load reduction because of the actions taken by all the customers, the interaction among the customers also needs to be carefully included in the contract design. The contract design and its properties are presented and illustrated through examples. This paper proposes a probabilistic optimization method that produces optimal bidding curves to be submitted by an aggregator to the day-ahead electricity market and the intraday market, considering the flexible demand of his customers (based in time dependent resources such as batteries and shiftable demand) and taking into account the possible imbalance costs as well as the uncertainty of forecasts (market prices, demand, and renewable energy sources (RES) generation). The optimization strategy aims to minimize the total cost of the traded energy over a whole day, taking into account the intertemporal constraints. The proposed formulation leads to the solution of different linear optimization problems, following the natural temporal sequence of electricity spot markets. Intertemporal constraints regarding time dependent resources are fulfilled through a scheduling process performed after the day-ahead market clearing. Each of the different problems is of moderate dimension and requires short computation times. The benefits of the proposed strategy are assessed comparing the payments done by an aggregator over a sample period of one year following different deterministic and probabilistic strategies. Results show that probabilistic strategy reports better benefits for aggregators participating in power markets. In this paper, we consider a smart power infrastructure, where several subscribers share a common energy source. Each subscriber is equipped with an energy consumption controller (ECC) unit as part of its smart meter. Each smart meter is connected to not only the power grid but also a communication infrastructure such as a local area network. This allows two-way communication among smart meters. Considering the importance of energy pricing as an essential tool to develop efficient demand side management strategies, we propose a novel real-time pricing algorithm for the future smart grid. We focus on the interactions between the smart meters and the energy provider through the exchange of control messages which contain subscribers' energy consumption and the real-time price information. First, we analytically model the subscribers' preferences and their energy consumption patterns in form of carefully selected utility functions based on concepts from microeconomics. Second, we propose a distributed algorithm which automatically manages the interactions among the ECC units at the smart meters and the energy provider. The algorithm finds the optimal energy consumption levels for each subscriber to maximize the aggregate utility of all subscribers in the system in a fair and efficient fashion. Finally, we show that the energy provider can encourage some desirable consumption patterns among the subscribers by means of the proposed real-time pricing interactions. Simulation results confirm that the proposed distributed algorithm can potentially benefit both subscribers and the energy provider. There is growing interest in the use of grid-level storage to smooth variations in supply that are likely to arise with an increased use of wind and solar energy. Energy arbitrage, the process of buying, storing, and selling electricity to exploit variations in electricity spot prices, is becoming an important way of paying for expensive investments into grid-level storage. Independent system operators such as the New York Independent System Operator NYISO require that battery storage operators place bids into an hour-ahead market although settlements may occur in increments as small as five minutes, which is considered near "real-time". The operator has to place these bids without knowing the energy level in the battery at the beginning of the hour and simultaneously accounting for the value of leftover energy at the end of the hour. The problem is formulated as a dynamic program. We describe and employ a convergent approximate dynamic programming ADP algorithm that exploits monotonicity of the value function to find a revenue-generating bidding policy; using optimal benchmarks, we empirically show the computational benefits of the algorithm. Furthermore, we propose a distribution-free variant of the ADP algorithm that does not require any knowledge of the distribution of the price process and makes no assumptions regarding a specific real-time price model. We demonstrate that a policy trained on historical real-time price data from the NYISO using this distribution-free approach is indeed effective.