Game-theoretic Demand-side Management Robust to Non-Ideal Consumer Behavior in Smart Grid

TL;DR

This paper models a demand-side energy management system in smart grids using game theory, accounting for non-ideal consumer behavior with prospect theory, and demonstrates its robustness through simulations.

Contribution

It introduces a game-theoretic framework incorporating subjective consumer decision-making, showing robustness of the energy trading system to non-rational behaviors.

Findings

Unique Stackelberg equilibrium identified

System benefits remain robust despite deviations from rationality

Simulation confirms revenue maximization and cost minimization

Abstract

This paper investigates effects of realistic, non-ideal, decisions of energy users as to whether to participate in an energy trading system proposed for demand-side management of a residential community. The energy trading system adopts a non-cooperative Stackelberg game between a community energy storage (CES) device and users with rooftop photovoltaic panels where the CES operator is the leader and the users are the followers. Participating users determine their optimal energy trading starting time to minimize their personal daily energy costs while subjectively viewing their opponents' actions. Following a non-cooperative game, we study the subjective behavior of users when they decide on energy trading starting time using prospect theory. We show that depending on the decisions of participating-time, the proposed energy trading system has a unique Stackelberg equilibrium at which the CES operator maximizes their revenue while users minimize their personal energy costs attaining a Nash equilibrium. Simulation results confirm that the benefits of the energy trading system are robust to decisions of participating-time that significantly deviate from complete rationality.