Comparative analysis of dynamic pricing schemes in distributed energy management of residential users in smart grid

Abstract

Increasing power demand, greenhouse gas emissions, and the old infrastructure are serious concerns in the existing power system. With the advent of the smart grid, demand response (DR) has emerged as an effective approach to handle these issues. The selection of an appropriate DR program is vital to acquire the maximum benefits for the utility and the consumers. In this context, a distributed energy management scheme for residential consumers is presented and analyzed to observe the impact of different pricing schemes. The three dynamic pricing schemes considered in this work are based on linear function, the logarithmic function, and the penalty-based linear function of aggregated load. A non-cooperative game is used to formulate the energy management problem of the consumers. The Nash equilibrium of the game is obtained using the proximal decomposition algorithm. The results are obtained for different cases based on the presence of a storage device, a dispatchable generation unit, and two different modes of operation of an electric vehicle. The best pricing scheme is chosen based on the minimum cost, the peak-to-average ratio of the system load profile, and consumer comfort.