APSIPA Transactions on Signal and Information Processing > Vol 3 > Issue 1

Incentive compatible demand response games for distributed load prediction in smart grids

Yan Chen, University of Maryland, USA, yan@umd.edu , W. Sabrina Lin, University of Maryland, USA, Feng Han, University of Maryland, USA, Yu-Han Yang, University of Maryland, USA, Zoltan Safar, University of Maryland, USA, K. J. Ray Liu, University of Maryland, USA
 
Suggested Citation
Yan Chen, W. Sabrina Lin, Feng Han, Yu-Han Yang, Zoltan Safar and K. J. Ray Liu (2014), "Incentive compatible demand response games for distributed load prediction in smart grids", APSIPA Transactions on Signal and Information Processing: Vol. 3: No. 1, e9. http://dx.doi.org/10.1017/ATSIP.2014.8

Publication Date: 16 Sep 2014
© 2014 Yan Chen, W. Sabrina Lin, Feng Han, Yu-Han Yang, Zoltan Safar and K. J. Ray Liu
 
Subjects
 
Keywords
Smart gridDemand responseGame theoryIncentive compatible
 

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In this article:
I. INTRODUCTION 
II. GAME-THEORETIC FORMULATION 
III. ANALYSIS OF THE DEMAND RESPONSE GAME 
IV. SIMULATION RESULTS 
V. CONCLUSIONS 

Abstract

While demand response has achieved promising results on making the power grid more efficient and reliable, the additional dynamics and flexibility brought by demand response also increase the uncertainty and complexity of the centralized load forecast. In this paper, we propose a game-theoretic demand response scheme that can transform the traditional centralized load prediction structure into a distributed load prediction system by the participation of customers. Moreover, since customers are generally rational and thus naturally selfish, they may cheat if cheating can improve their payoff. Therefore, enforcing truth-telling is crucial. We prove analytically and demonstrate with simulations that the proposed game-theoretic scheme is incentive compatible, i.e., all customers are motivated to report and consume their true optimal demands and any deviation will lead to a utility loss. We also prove theoretically that the proposed demand response scheme can lead to the solution that maximizes social welfare and is proportionally fair in terms of utility function. Moreover, we propose a simple dynamic pricing algorithm for the power substation to control the total demand of all customers to meet the target demand curve. Finally, simulations are shown to demonstrate the efficiency and effectiveness of the proposed game-theoretic algorithm.

DOI:10.1017/ATSIP.2014.8