Virtual cost approach: Electricity consumption scheduling for smart grids/cities in price-directed electricity markets

In this paper a new approach for electricity consumption scheduling for smart grids/cities in price-directed electricity markets is presented. The new approach, named virtual cost, integrates electricity price forecasting and load forecasting to obtain an optimal consumption pattern. The goal of virtual cost approach is to provide the springboard for automated consumption scheduling with minimum human intervention, while reducing the expenses for electricity purchasing. Towards that end, the proposed approach takes into consideration three factors: the anticipated electricity price for a day-ahead horizon, the respective anticipated load and an upper limit for expenses that is manually input by the consumer. Integration of these factors allows the intelligent meter through which the consumer is connected to smart grid to make decisions over load consumption scheduling aiming at reducing cost. The proposed approach is tested on real world data taken from the New England area. Results exhibit a reduction in consumption expenses, indicating the potentiality of the virtual cost approach as an automated scheduling tool for electricity consumption in price directed electricity markets.