Game theoretic analysis of privacy-aware Advanced Metering Infrastructure

Demand response systems seek to flatten the demand for electricity by providing real-time pricing to consumers to motivate avoidance of power-intensive tasks when rates are high. Advanced Metering Infrastructure (AMI) has been developed to facilitate this process, allowing for billing that applies fine-grained prices to fine-grained consumption data. But AMI also presents a unique privacy risk to consumers - fine-grained consumption data reveals a great deal about the behaviour, beliefs, and preferences of consumers. Such information is of interest to third parties, further exacerbating the privacy risk. This suggests a need for AMI to be developed from a privacy-aware perspective. Adopting a game-theoretic model, we consider utilities that offer both privacy-aware and non-privacy-aware AMI. A non-cooperative game is developed in which a representative consumer strategizes against the utility. The regulatory measures required for the desired privacy-facilitating Nash equilibrium of the game are discussed, and recommendations for policymakers are presented. In particular, it is found that a combination of regulation and consumer awareness must overcome the financial benefit arising from the sale of consumption information to third parties.