IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v81y2015icp766-776.html
   My bibliography  Save this article

Demand side management in a smart grid with multiple electricity suppliers

Author

Listed:
  • Jalali, Mohammad Majid
  • Kazemi, Ahad

Abstract

In future smart grids, the electricity suppliers can modify the customers' load consumption pattern by implementing appropriate DSM (demand side management) programs using smart meters. Most of the existing studies on DSM, only consider one utility company in the supplier side. In this paper, the possibility of existing more than one supplier in the smart grid is addressed by modeling the DSM problem as two non-cooperative games: the supplier side game, and the customer side game. In the first game, the suppliers' profit maximization problem is formulated by applying supply function bidding mechanism. In the proposed mechanism, the electricity suppliers submit their bids to the DSM center, where the electricity price is computed and is sent to the customers. In the second game, the customers aim to determine optimal load profile to maximize their daily payoff. The existence and uniqueness of the Nash equilibrium in the mentioned games are explored and a computationally tractable distributed algorithm is designed to determine the equilibrium. Simulations are performed for a smart grid system with 3 suppliers and 1000 customers. Simulation results demonstrate the superior performance of the proposed mechanism in reducing the peak load and increasing the suppliers' profit and the customers' payoff.

Suggested Citation

  • Jalali, Mohammad Majid & Kazemi, Ahad, 2015. "Demand side management in a smart grid with multiple electricity suppliers," Energy, Elsevier, vol. 81(C), pages 766-776.
    • Handle: RePEc:eee:energy:v:81:y:2015:i:c:p:766-776
    DOI: 10.1016/j.energy.2015.01.027
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544215000468
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2015.01.027?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Li, Xiao Hui & Hong, Seung Ho, 2014. "User-expected price-based demand response algorithm for a home-to-grid system," Energy, Elsevier, vol. 64(C), pages 437-449.
    2. Su, Wencong & Huang, Alex Q., 2014. "A game theoretic framework for a next-generation retail electricity market with high penetration of distributed residential electricity suppliers," Applied Energy, Elsevier, vol. 119(C), pages 341-350.
    3. Atikol, Uğur, 2013. "A simple peak shifting DSM (demand-side management) strategy for residential water heaters," Energy, Elsevier, vol. 62(C), pages 435-440.
    4. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
    5. Green, Richard J & Newbery, David M, 1992. "Competition in the British Electricity Spot Market," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 929-953, October.
    6. Bergaentzlé, Claire & Clastres, Cédric & Khalfallah, Haikel, 2014. "Demand-side management and European environmental and energy goals: An optimal complementary approach," Energy Policy, Elsevier, vol. 67(C), pages 858-869.
    7. Ioakimidis, Christos S. & Oliveira, Luís J. & Genikomsakis, Konstantinos N. & Dallas, Panagiotis I., 2014. "Design, architecture and implementation of a residential energy box management tool in a SmartGrid," Energy, Elsevier, vol. 75(C), pages 167-181.
    8. Wang, Jianhui & Zhou, Zhi & Botterud, Audun, 2011. "An evolutionary game approach to analyzing bidding strategies in electricity markets with elastic demand," Energy, Elsevier, vol. 36(5), pages 3459-3467.
    9. Green, Richard J, 1996. "Increasing Competition in the British Electricity Spot Market," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 205-216, June.
    10. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    11. Claire Bergaentzlé & Cédric Clastres & Haikel Khalfallah, 2014. "Demand-side management and European environmental and energy goals: an optimal complementary approach," Post-Print halshs-00928678, HAL.
    12. Ross Baldick & Ryan Grant & Edward Kahn, 2004. "Theory and Application of Linear Supply Function Equilibrium in Electricity Markets," Journal of Regulatory Economics, Springer, vol. 25(2), pages 143-167, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Torkan, Ramin & Ilinca, Adrian & Ghorbanzadeh, Milad, 2022. "A genetic algorithm optimization approach for smart energy management of microgrids," Renewable Energy, Elsevier, vol. 197(C), pages 852-863.
    2. Sarker, Eity & Seyedmahmoudian, Mehdi & Jamei, Elmira & Horan, Ben & Stojcevski, Alex, 2020. "Optimal management of home loads with renewable energy integration and demand response strategy," Energy, Elsevier, vol. 210(C).
    3. Amna Malik & Zain Ali & Ahmed Bilal Awan & Ahmed G. Abo-Khalil & Guftaar Ahmad Sardar Sidhu, 2018. "Achieving Cost Minimization and Fairness in Multi-Supplier Smart Grid Environment," Energies, MDPI, vol. 11(6), pages 1-17, May.
    4. Tengfei Ma & Junyong Wu & Liangliang Hao & Huaguang Yan & Dezhi Li, 2018. "A Real-Time Pricing Scheme for Energy Management in Integrated Energy Systems: A Stackelberg Game Approach," Energies, MDPI, vol. 11(10), pages 1-19, October.
    5. Dong, Lianxin & Fan, Shuai & Wang, Zhihua & Xiao, Jucheng & Zhou, Huan & Li, Zuyi & He, Guangyu, 2021. "An adaptive decentralized economic dispatch method for virtual power plant," Applied Energy, Elsevier, vol. 300(C).
    6. Baum, Zvi & Palatnik, Ruslana Rachel & Ayalon, Ofira & Elmakis, David & Frant, Shimon, 2019. "Harnessing households to mitigate renewables intermittency in the smart grid," Renewable Energy, Elsevier, vol. 132(C), pages 1216-1229.
    7. Haider, Haider Tarish & See, Ong Hang & Elmenreich, Wilfried, 2016. "Residential demand response scheme based on adaptive consumption level pricing," Energy, Elsevier, vol. 113(C), pages 301-308.
    8. Li, Xin & Chen, Hsing Hung & Tao, Xiangnan, 2016. "Pricing and capacity allocation in renewable energy," Applied Energy, Elsevier, vol. 179(C), pages 1097-1105.
    9. Mohammad Rozali, Nor Erniza & Wan Alwi, Sharifah Rafidah & Manan, Zainuddin Abdul & Klemeš, Jiří Jaromír, 2015. "Peak-off-peak load shifting for hybrid power systems based on Power Pinch Analysis," Energy, Elsevier, vol. 90(P1), pages 128-136.
    10. Lu, Qing & Lü, Shuaikang & Leng, Yajun, 2019. "A Nash-Stackelberg game approach in regional energy market considering users’ integrated demand response," Energy, Elsevier, vol. 175(C), pages 456-470.
    11. Alasseri, Rajeev & Tripathi, Ashish & Joji Rao, T. & Sreekanth, K.J., 2017. "A review on implementation strategies for demand side management (DSM) in Kuwait through incentive-based demand response programs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 617-635.
    12. Yu, Biying & Tian, Yaming & Zhang, Junyi, 2015. "A dynamic active energy demand management system for evaluating the effect of policy scheme on household energy consumption behavior," Energy, Elsevier, vol. 91(C), pages 491-506.
    13. Rauner, Sebastian & Eichhorn, Marcus & Thrän, Daniela, 2016. "The spatial dimension of the power system: Investigating hot spots of Smart Renewable Power Provision," Applied Energy, Elsevier, vol. 184(C), pages 1038-1050.
    14. Sadiq Ahmad & Ayaz Ahmad & Muhammad Naeem & Waleed Ejaz & Hyung Seok Kim, 2018. "A Compendium of Performance Metrics, Pricing Schemes, Optimization Objectives, and Solution Methodologies of Demand Side Management for the Smart Grid," Energies, MDPI, vol. 11(10), pages 1-33, October.
    15. Khezri, Rahmat & Golshannavaz, Sajjad & Vakili, Ramin & Memar-Esfahani, Bahram, 2017. "Multi-layer fuzzy-based under-frequency load shedding in back-pressure smart industrial microgrids," Energy, Elsevier, vol. 132(C), pages 96-105.
    16. Rabiee, Abdorreza & Sadeghi, Mohammad & Aghaeic, Jamshid & Heidari, Alireza, 2016. "Optimal operation of microgrids through simultaneous scheduling of electrical vehicles and responsive loads considering wind and PV units uncertainties," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 721-739.
    17. Farzamkia, Saleh & Ranjbar, Hossein & Hatami, Alireza & Iman-Eini, Hossein, 2016. "A novel PSO (Particle Swarm Optimization)-based approach for optimal schedule of refrigerators using experimental models," Energy, Elsevier, vol. 107(C), pages 707-715.
    18. Zhang, Hongwei & Wang, Jinsong & Ding, Yuemin, 2019. "Blockchain-based decentralized and secure keyless signature scheme for smart grid," Energy, Elsevier, vol. 180(C), pages 955-967.
    19. Gordon Rausser & Wadim Strielkowski & Dalia Å treimikienÄ—, 2018. "Smart meters and household electricity consumption: A case study in Ireland," Energy & Environment, , vol. 29(1), pages 131-146, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haider, Haider Tarish & See, Ong Hang & Elmenreich, Wilfried, 2016. "Residential demand response scheme based on adaptive consumption level pricing," Energy, Elsevier, vol. 113(C), pages 301-308.
    2. Ramesh Johari & John N. Tsitsiklis, 2011. "Parameterized Supply Function Bidding: Equilibrium and Efficiency," Operations Research, INFORMS, vol. 59(5), pages 1079-1089, October.
    3. Haider, Haider Tarish & See, Ong Hang & Elmenreich, Wilfried, 2016. "A review of residential demand response of smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 166-178.
    4. Perez, Eloy, 2007. "A model of vertical integration and investment in generation capacity in electricity markets: The case of the bidding game," Socio-Economic Planning Sciences, Elsevier, vol. 41(4), pages 272-290, December.
    5. Zugang Liu & Anna Nagurney, 2009. "An integrated electric power supply chain and fuel market network framework: Theoretical modeling with empirical analysis for New England," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(7), pages 600-624, October.
    6. Holmberg, Pär & Newbery, David & Ralph, Daniel, 2013. "Supply function equilibria: Step functions and continuous representations," Journal of Economic Theory, Elsevier, vol. 148(4), pages 1509-1551.
    7. Crawford, Gregory S. & Crespo, Joseph & Tauchen, Helen, 2007. "Bidding asymmetries in multi-unit auctions: Implications of bid function equilibria in the British spot market for electricity," International Journal of Industrial Organization, Elsevier, vol. 25(6), pages 1233-1268, December.
    8. Willems, Bert & Rumiantseva, Ina & Weigt, Hannes, 2009. "Cournot versus Supply Functions: What does the data tell us?," Energy Economics, Elsevier, vol. 31(1), pages 38-47, January.
    9. Dzikri Firmansyah Hakam, 2018. "Market Power Modelling in Electricity Market: A Critical Review," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 347-356.
    10. Bolle, Friedel & Grimm, Veronika & Ockenfels, Axel & del Pozo, Xavier, 2013. "An experiment on supply function competition," European Economic Review, Elsevier, vol. 63(C), pages 170-185.
    11. Clastres, Cédric & Khalfallah, Haikel, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Energy Economics, Elsevier, vol. 98(C).
    12. Aitor Ciarreta & María Espinosa, 2010. "Market power in the Spanish electricity auction," Journal of Regulatory Economics, Springer, vol. 37(1), pages 42-69, February.
    13. Varawala, Lamia & Hesamzadeh, Mohammad Reza & Dán, György & Bunn, Derek & Rosellón, Juan, 2023. "A pricing mechanism to jointly mitigate market power and environmental externalities in electricity markets," Energy Economics, Elsevier, vol. 121(C).
    14. E. Anderson & A. Philpott & H. Xu, 2007. "Modelling the effects of interconnection between electricity markets subject to uncertainty," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 65(1), pages 1-26, February.
    15. Majid Al-Gwaiz & Xiuli Chao & Owen Q. Wu, 2017. "Understanding How Generation Flexibility and Renewable Energy Affect Power Market Competition," Manufacturing & Service Operations Management, INFORMS, vol. 19(1), pages 114-131, February.
    16. Aitor Ciarreta & Carlos Gutiérrez-Hita, 2012. "Collusive behaviour under cost asymmetries when firms compete in supply functions," Journal of Economics, Springer, vol. 106(3), pages 195-219, July.
    17. Cédric Clastres & Haikel Khalfallah, 2021. "Dynamic pricing efficiency with strategic retailers and consumers: An analytical analysis of short-term market interactions," Post-Print hal-03193212, HAL.
    18. Victor Avramov, 2020. "Modeling the competition on the electricity stock market," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 65-79.
    19. Märkle-Huß, Joscha & Feuerriegel, Stefan & Neumann, Dirk, 2018. "Large-scale demand response and its implications for spot prices, load and policies: Insights from the German-Austrian electricity market," Applied Energy, Elsevier, vol. 210(C), pages 1290-1298.
    20. Alasseri, Rajeev & Tripathi, Ashish & Joji Rao, T. & Sreekanth, K.J., 2017. "A review on implementation strategies for demand side management (DSM) in Kuwait through incentive-based demand response programs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 617-635.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:81:y:2015:i:c:p:766-776. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.