Economics of customer's decisions in smart grid. Issue 1 (1st January 2015)

• Record Type: Journal Article
• Authors: Misra, Sudip; Bera, Samaresh; Obaidat, Mohammad S.
• Is Part Of: IET networks. Volume 4:Issue 1(2015)
• Page Start: 37
• Page End: 43
• Publication Date: 2015-01-01
• Subjects: smart power grids -- power system economics -- energy storage -- renewable energy sources -- costing -- power markets -- Markov processes -- decision making -- decision theory -- energy management systems -- power system management; customer decision economics -- smart grid energy -- energy storage -- renewable energy source -- self‐generated energy -- Markov decision process -- MDP -- decision making policy -- energy management process -- energy exchange; Computer network architectures -- Periodicals; Computer network protocols -- Periodicals; Information networks -- Periodicals; Telecommunication systems -- Periodicals; 004.605
• DOI: 10.1049/iet-net.2013.0182
• Languages: English
• ISSNs: 2047-4954

Abstract

Abstract : In this study, the authors study the problem of allowing customers to use their storage energy, grid energy, as well as privately owned renewable sources of energy. The customer has three options – grid, storage and self‐generated energy, to fulfill the energy requirements. The grid decides real‐time price to maximise its revenue, while ensuring customers' participation depending on three factors – 'demand', 'supply' and 'time of use'. On the other hand, a customer needs to choose strategies on his/her required energy and associated cost, depending on the storage and self‐generated energy, to maximise the pay‐off. They use Markov decision process (MDP) to design this decision making policy of the customer. In such a MDP‐based decision model, a cost‐effective energy management process is established, and, thus, utility of the customers is maximised. Simulation results show that using the proposed approach, the customers decide the strategies to optimise a trade‐off between energy exchange and associated cost. Thus, the utility for customer is increased approximately 60% with the presence of grid, storage and self‐generated energy sources than that of using only grid and storage energy.