Two-phase demand response based on privacy-preserving billing for smart grid

In the future smart grid, the large volatility of renewable energy resources (e.g., solar and wind power) and Plug-in Vehicles (PEVs) present severe challenges to a reliable network operation. These difficulties can be alleviated by utilizing extensive information exchange between the power suppliers and customers. Demand response (DR) refers to such mechanisms that coordinate supply/demand information to match the power supply or shape the power demand. In this paper we propose a two-phase DR algorithm that allows the utility to address the problem of supply deficit. Specifically, we define the load factor to characterize customers´ heterogeneous demand curves and the rate-of-disutility to quantify their willingness for adjusting demand. Based on that, we design a privacy-preserving billing function that reflects different contributions of the customers. Our proposal finally seeks the optimal allocation of network resources through prioritizing load shedding of different customers. This work serves as a starting point to include communication and security constraints for designing practical demand-response schemes for the smart grid.