Online Algorithm for Optimal Real-Time Energy Distribution in the Smart Grid

The two-way energy and information flows in a smart grid, together with the smart devices, bring new perspectives to energy management and demand response. This paper investigates an online algorithm for electricity energy distribution in a smart grid environment. We first present a formulation that captures the key design factors such as user´s utility and cost, grid load smoothing, dynamic pricing, and energy provisioning cost. The problem is shown to be convex and can be solved with an offline algorithm if future user and grid related information are known a priori. We then develop an online algorithm that only requires past and present information about users and the grid, and prove that the online solution is asymptotically optimal. The proposed energy distribution framework and the online algorithm are quite general, suitable for a wide range of utility, cost, and pricing functions. It is evaluated with trace-driven simulations and shown to outperform a benchmark scheme.