A Cooperative Games Approach For Demand Side Management in Smart Grids
A Cooperative Games Approach For Demand Side Management in Smart Grids
A Cooperative Games Approach For Demand Side Management in Smart Grids
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Abstract—Demand-Side Management (DSM) programs con- y Auxiliary variable for peak load (peak pricing
sider the energy consumers as intelligent agents and as key model).
players for system management, gaining importance on the Smart zt Auxiliary variable for total cost in inclining block
Grid era. In this context, we propose a cooperative approach rates model.
for the decision-making process of an aggregator that represents
a group of residential consumers in a DSM program. The
aggregator participates in a day-ahead market and has to decide Constants:
the best load curves for their consumers in terms of energy costs. αn,a Earlier starting time of controllable appliance a of
Our framework is divided in 3 steps: data submission, scheduling consumer n.
model and cost sharing. In the first one, consumers send to the βn,a Later finishing time of controllable appliance a of
aggregator their consumption preferences. With that information, consumer n.
the aggregator schedules consumers’ appliances, respecting their δ Size of time slot (in hours).
preferences and minimizing the total DSM cost, using a mixed-
integer scheduling model. In the last step, the aggregator attempts
ηt (Pt ) Inclining block rates pricing model as a function
to allocate total program cost to the participants in a fair manner, of power curve, in $/kW h.
using the Shapley Value. We test our framework in two random λ Peak load charge in $/kW (peak pricing model).
instances, with different appliances, preferences and number of πt Time-of-use tariff at time slot t in $/kW h.
consumers and verify that more flexible participants contribute ρt Price multiplier for when energy consumption ex-
more to the coalition value, and so forth pay less. Moreover, the ceed the threshold (inclining block rates model).
peak pricing and inclining block rates models have the capacity dn,a Duration of appliance a of consumer n (in number
to reduce peak-to-average ratio of the system. of time slots).
Keywords—Cooperative Games, Demand-Side Management, Ln,a Power rate of appliance a of consumer n.
Load Scheduling, Residential Power Management, Shapley Value. Rt Energy consumption threshold, in kW h (inclining
block rates model).
T Last slot of time horizon.
I. N OMENCLATURE wn,t Base load of consumer n at time slot t.
Sets and indices:
II. I NTRODUCTION
a Index for appliances.
n
t
Index for consumers.
Index for time slots. T HE introduction of the smart grid concept brought new
solutions to electric grid planning, management and con-
trol. It employs advanced communication systems and modern
An Set of all shiftable appliances of consumer n.
C Set of consumers in the coalition. computational technologies to increase grid’s efficiency and
In Set of interruptible appliances of consumer n. autonomy.
N Set of consumers. One of its aspects is demand side management (DSM),
T Set of time slots. defined as everything made at consumer side. DSM programs
Un Set of uninterruptible appliances of consumer n. consider the energy consumers as intelligent agents and as
key players for system management. Including consumers in
the operation and planning decision taken process of electrical
Variables and functions: systems can increase demand elasticity and add another degree
φn Payoff of consumer n. of freedom to grid operation and maintenance. Therefore, the
Pt Power curve of the consumers in time slot t. development of DSM models can be a competitive solution
v(C) Value of a coalition C. to consumption growth compared to building new generation
v(N ) Value of the grand coalition N . plants, installing storage systems or expanding transmission
xn,a,t Binary scheduling variable: is 1 if appliance a of and distribution network.
consumer n is on at time t and 0 otherwise. However, designing, implementing and operating DSM pro-
grams is not a trivial task and there is an extensive literature
This work has been supported by the Brazilian agency CAPES about this challenge, as can be seen in [1]. Pricing methods,
The authors are with the Graduate Program in Electrical Engineering -
Federal University of Minas Gerais - Av. Antônio Carlos 6627, 31270- as time-of-use tariffs or real-time pricing, are the most widely
901, Belo Horizonte, MG, Brazil (e-mail: lusantamarques@gmail.com and used mechanisms for implementing demand participation.
wadaed@cpdee.ufmg.br). They penalize certain peak periods of time with higher prices,
THE 12th LATIN-AMERICAN CONGRESS ON ELECTRICITY GENERATION AND TRANSMISSION - CLAGTEE 2017 2
guiding consumers’ load curves. Even though they are easy devices of multiple consumers and to bring the load consump-
to implement, they depend on consumers’ disposal to change tion curve as close as to the objective load consumption curve.
their household routines, which is a challenging task [2]. [9] proposes a controlling strategy for a PHEV aggregator,
Moreover, it is difficult to consumers to respond manually to which schedules their batteries charging times considering the
the time-varying prices [3]. Finally, they can create new peaks local marginal prices (LMP) of the grid. Even though they
in cheaper hours [1]. can provide grid and market advantages, these models are
Direct load control (DLC) is another extensively studied more complex and difficult to solve, because they have more
method. It adds technology to the demand management pro- variables to be coordinated. Generally, they are solved using
cess, helping consumers to benefit from DSM advantages with- heuristic methods [8], [9].
out having to continuously analyze prices and consumption to When the control technology is centralized, guided by an
decide whether to turn on the television or prepare dinner. aggregator or the DSO, the controller challenge is to esti-
The control technology can be either real-time or solved for mate correctly their clients demand and contract the predicted
predefined time horizons, mainly the day-ahead. amount or bid ancillary services at the market. Moreover, the
In the first case, [2] develops an online and real-time control controller must charge their clients correctly. As the consumers
algorithm that optimizes the loads of a smart home as soon are rational and independent, with preferences and priorities,
as they are started. It analyses all the equipment status and game theory offers an interesting analytical and conceptual
modifies background electrical loads consumption, which do framework to deal with the study of their complex interactions
not impact users perceived comfort and have some scheduling [10].
flexibility (e.g. fridge and heaters). The objective is to flatten In this context, some researches use game theory in the
demand and results are interesting from the point of view of development of demand side management programs. For ex-
the overall grid. ample, [11] proposes a compensation model to consumers of
On the other hand, some control techniques work in an a DSM program using Shapley Value. The aggregator bids
offline basis, programming the loads in a future time horizon, spinning reserve offers in the market and consumers cut load
more frequently the day-ahead. In this category, there are when the reserve is triggered. They are fairly payed for their
algorithms for the optimal control of one load of a smart response. [12] and [13] also present scheduling load models for
home (e.g. water heater) [4], [5]. They can model the load in consumption optimization. The first one provides a model for
detail, including comfort constraints (e.g. minimum accepted an aggregator who needs to optimize the energy consumption
temperature of water) and non-linear behavior (e.g. thermal of a group of smart homes and to decide how much power
dynamics). However, these models do not consider global must be purchased from the market the next day. It shares
information about consumers’ consumption in general, being the cost between participants using a collaborative approach.
sub-optimal in the total energy cost minimization of a smart On the other hand, the second considers a competitive game
home. theory environment and Nash Equilibrium. This approach is
Another group of applications focus on scheduling all loads interesting because it decentralizes the controlling algorithms,
of a smart home or an industry. [6] proposes an optimal and and each consumer takes his decision considering information
automatic load control model for a residential consumer, which from the others until the equilibrium is reached. Finally,
schedules all the responsive appliances to minimize the total [14] focuses on Shapley Value aspects and implement this
cost of energy and the waiting time for the operation of each methodology to demand response program and to distributed
device. The pricing model guiding the optimization is the day- generation compensation.
ahed real-time prices (RTP) with inclining block rates (IBR) Given this background, we propose a cooperative approach
in order to result in a more balanced load curve. [3] includes for the decision-making process of an aggregator that repre-
plug-in electric vehicles (PHEVs) and storage systems to the sents a group of residential consumers in a DSM program.
model. The pricing environment uses the time-of-use tariff and The aggregator participates in a day-ahead market and has to
to cap the peak consumption, the model limits the energy decide the best load curves for their consumers in terms of
transfer. [7] design an scheduling model for the industry, energy costs. We propose a mixed-integer scheduling model
aiming to maximize profit, and consider many peculiarities of which respects consumers preferences. The total cost is divided
the sector. These three models are solvable with linear/integer between the participants using Shapley Value.
programming solvers given that they deal with a reduced Our contributions are as follows: we propose a new schedul-
number of loads, in other words, variables. Even though they ing model based on network optimization concepts to reduce
try to reduce the peak-to-average ratio (PAR) by means of the the total consumption cost of a consumer’s group respecting
pricing model, they do not consider the optimization of a group their preferences. We use a new model to divide the total cost
of consumers or the communication between them. between the participants, using cooperative game theory logic.
Some DLC programs assemble consumers and manage their We test our framework in two random instances, based on real
loads using a centralized approach. An aggregator or the data, which enables an extensive analysis.
distribution system operator (DSO) is responsible of a group The proposed approach has two advantages compared to
of consumers and control their consumption pattern in order the majority of previous research: it allows small consumers to
to reach some objective, like reduce their bills, reduce the participate in the wholesale market via the representation of an
network PAR, provide ancillary services to the grid etc. In aggregator, which is responsible for the optimal management
this framework, [8] develops a model to schedule the shiftable of their loads; and it reduces the total PAR of the group,
THE 12th LATIN-AMERICAN CONGRESS ON ELECTRICITY GENERATION AND TRANSMISSION - CLAGTEE 2017 3
The rest of this paper is organized as follows. We present Some loads, as discussed previously, are uninterruptable,
the market context and optimization model in Section III. which means once they started, they can not be stopped. We
We explain the Shapley Value concepts applied to the cost define equation (3) to guarantee this behavior.
sharing between participants in Section IV. We introduce a
simple example to understand our approach in Section V. The
simulation results are presented in Section VI. The paper is xn,a,t − xn,a,t+1 + xn,a,t+k ≤ 1 ∀n ∈ N
concluded in VII. ∀a ∈ An
(3)
∀k = 2, . . . , T − 1
III. S CHEDULING M ODEL ∀t = αn,a , . . . , βn,a − k
In this section, we present the mathematical formulation of If we consider Ln,a as the rated power of consumer’s
the optimal residential power scheduling problem. We consider appliances, the power curve of the group of participants can
the market environment shown in Fig. 1, where an aggregator be defined as:
serves a number of consumers interested in the demand side
management program. It receives the day-ahead time-of-use
!
X X
tariffs with peak prices or inclining block rates from the Pt = wn,t + Ln,a xn,a,t ∀t ∈ T (4)
wholesale market and the consumption preferences from the n∈N a∈An
consumers via a communication infrastructure. With that in-
formation, it performs a mixed-integer scheduling optimization
B. Peak Pricing Model
and sends back control messages to the smart loads. The
objective is to schedule the controllable loads in order to Generally, this pricing model is composed by two rates:
minimize participants energy bills, subjected to consumers usage charge and peak load charge [7]. We adopt time-of-use
preferences. tariffs for the usage charge to represent some electricity cost
variation in a day. They are energy prices and are denoted by
πt $/kW h. The peak load charge depends on the consumers’
A. Residential Consumers daily highest load. For this reason, it flattens the load curve and
Consider a set of consumers N represented by the ag- reduces the peak-to-average ratio. The peak price is a capacity
gregator in the wholesale market. Each consumer n ∈ N cost and is represented by λ $/kW . The total electricity cost to
has some household appliances classified into two categories: be minimized when the wholesale market adopts this pricing
uncontrollable or controllable. The first one represents non- police is:
shiftable loads, e.g. refrigerator, freezer and TV. Their power X
consumption are summed in one base load curve for each min πt δPt + λ max Pt (5)
consumer, denoted by the power vector wn . The latter group x t∈T
t∈T
THE 12th LATIN-AMERICAN CONGRESS ON ELECTRICITY GENERATION AND TRANSMISSION - CLAGTEE 2017 4
3
slot of the next day. Furthermore, he uses his AC at morning.
Consumer 2 has less flexibility and uses the washing machine
2.5
at morning, the dryer and AC at afternoon and the dishwasher
during the day. Consumer 3 has the least flexibility and prefers
2 to turn on all the appliances at evening.
base load (kW)
TABLE I. P REFERRED TIME SLOTS FOR STARTING TIME αn,a , FINISHING TIME βn,a , DURATION dn,a AND POWER RATE Ln,a OF EACH APPLIANCE
TABLE II. T IME - OF - USE TARIFFS USED TO TEST THE APPROACH TABLE IV. C OMPARISON BETWEEN THE CONSUMERS ’ PAYOFF WHEN
MARKET ADOPTS PEAK PRICING (PP) OR ICLINING BLOCK RATES (IBR)
Period Time Interval Price ($/kWh)
Dawn 00:00 to 06:00 0.160 Payoff φn (%)
Consumer n
Morning 06:00 to 11:00 0.176 PP IBR Flat Rate
Lunch time 11:00 to 13:00 0.208 1 15.72 15.75 15.50
Afternoon 13:00 to 17:00 0.192 2 13.52 13.57 12.86
Evening 17:00 to 22:00 0.320 3 12.44 12.47 12.66
Night 22:00 to 24:00 0.192 4 17.75 17.75 17.81
5 16.64 16.53 17.98
6 16.40 16.35 15.70
TABLE III. C OALITION VALUE v(C) OF ALL POSSIBLE COALITIONS
C⊆N 7 7.55 7.58 7.49
Total (%) 100.00 100.00 100.00
Coalition (C) Cost (v(C)) $ Total ($) 20.32 19.77 -
{} 0
{1} 5.47
{2} 5.62
{3} 6.56 notice the importance of consumption pattern and preferences
{1,2} 11.08 on the sharing. In a flat rate scenario, the consumers would
{1,3} 11.96 pay the share presented on the last column (calculated from
{2,3} 12.10 day-ahead total load). However, with the pricing models and
{1,2,3} 17.56 the optimization procedure, consumers’ share increases or
decreases depending on their controllable loads preferences
0.8 0.4 and on base load pattern. As an example, consumer 7, who do
Consumer 1
energy consumption of controllable loads (kWh)
Consumer 2
not have any controllable load, has to pay a larger share in the
0.7 0.35
Consumer 3 collaborative scenarios.
TOU tariff
0.6 0.3 In table V we present the consumers’ payoffs when they
optimize their consumption alone (decentralized case) and
TOU tariffs ($/kWh)
0.5 0.25 together in the grand coalition via the aggregator (centralized
case). It can be seen that all consumers reduce their electricity
0.4 0.2 payment when optimizing their loads together, for the peak
pricing model. Even consumer 7, who do not have controllable
0.3 0.15
loads, enjoys from the peak load reduction. However, for the
IBR pricing model, the outcomes are almost the same for
0.2 0.1
both cases and there is no advantage to consumers to optimize
0.1 0.05
consumption in the group. It is important to emphasize that the
threshold Rt for every coalition on the optimization procedure
0 0 is equal to the optimal peak load y of the peak pricing model
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 for the same coalition. This may justify the equal results in
time slot centralized/decentralized cases in IBR scenario, because the
Fig. 3. Energy consumption of consumers’ controllable loads in kWh with
value of the boundary is optimal.
price curve of TOU tariffs In terms of peak-to-average ratio—see eq. (20), Fig. 4 shows
that, in both models, the peak load is reduced when a central
controller optimizes consumers’ appliances (centralized curve),
from the peak pricing optimization (for each coalition) to compared to the case where each consumer optimizes his
compare the pricing methods efficiency on reducing PAR. consumption alone and the resulting power curves are summed
The consumers’ payoff depends on their total load on the (decentralized curve). In the peak pricing model, the PAR is
day and on their preferences. As can be seen on table IV, reduced from 2.29 to 1.95. In the second model, it is reduced
results of peak pricing and inclining block rates scenarios are from 2.34 to 1.95. The PAR is the same in centralized scenario
almost the same in terms of total cost split. It is interesting to for both cases.
THE 12th LATIN-AMERICAN CONGRESS ON ELECTRICITY GENERATION AND TRANSMISSION - CLAGTEE 2017 7
VII. C ONCLUSION
0
0 50 100 150 In this paper, we proposed an optimal, autonomous and
time slot centralized load scheduling model in order to minimize the
total electricity cost and also flatten consumption pattern.
Inclining Block Rates
12 Unlike most of the previous DSM strategies that focus on the
centralized optimization of each smart home independently, our approach
descentralized
10
considers a group of consumers represented by an aggregator
and the attempt to also minimize the system PAR, allowing
small consumers to participate in the wholesale market and
8 minimizing some operational costs of the DSO. Simulation
results confirm that the proposed approach can reduce con-
load (kW)
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