A voluntary-based real-time incentive scheme for smart grid demand management

In power system, consumers´ power demand are highly desirable information by grid operators for asset management and grid operation. However, users may hesitate to report such private information due to the potential privacy leakage risk and other extra cost. A compulsory-based scheme which forces consumers to reveal private data, or a punishment scheme in which consumers get penalty for unwillingness to disclose might not be desired. Given the importance of demand information, in this paper, we acknowledge consumers´ ownership rights on their private data and propose a novel voluntary-based real-time incentive scheme (RTIS) to promote demand management in the smart grid. In RTIS, Load Serving Entity (LSE) plays the role of power retailer. LSE rewards cooperating consumers with a discounted electricity retail price to compensate the consumers´ extra cost associated with participation. By carefully selecting a discount rate, RTIS ensures that LSE can collect sufficient demand response for load anticipation without detriment to its market revenue. Simulation results confirm that our proposed scheme can achieve satisfactory social welfare even compared with compulsory demand upload schemes.