Year: 2019
Type: preprint
Abstract: We design an optimal contract between a demand response aggregator (DRA) and a customer for incentive-based demand response. We consider a setting in which the customer is asked to reduce her consumption by the DRA and she is compensated for this reduction. However, since the DRA must supply the customer with as much power as she desires, a strategic customer can temporarily increase her base load to report a larger reduction as a part of the demand response event. The DRA wishes to incentivize the customer both to make the maximal effort in reducing the load and to not falsify the base load. We model the problem of designing the contract by the DRA for the customer as a management contract design problem and present a solution. The optimal contract consists of two parts: a part that depends on (the possibly inflated) load reduction as measured and another that provides a share of the profit that ensues to the DRA through the demand response event to the customer.
Source: arXiv (Cornell University)
Authors: Dobakhshari, Donya G., Gupta, Vijay
Institution: University of Notre Dame
Language: English
Topic: Smart Grid Energy Management
Subfield: Electrical and Electronic Engineering
Field: Engineering
Domain: Physical Sciences
Open Access status: green
Awards: CPS: Synergy: Collaborative Research: Architectural and Algorithmic Solutions for Large Scale PEV Integration into Power Grids, CPS: Synergy: Collaborative Research: Beyond Stability: Performance, Efficiency and Disturbance Management for Smart Infrastructure Systems, EAGER: Renewables: Collaborative Research: Market Designs for Distribution Systems with High Renewable Penetration
OpenAlex ID: W3026366177