@inproceedings{364518e0ebd94b6da60293318de00877,
title = "Feasibility of using discriminate pricing schemes for energy trading in smart grid",
abstract = "This paper investigates the feasibility of using a discriminate pricing scheme to offset the inconvenience that is experienced by an energy user (EU) in trading its energy with an energy controller in smart grid. The main objective is to encourage EUs with small distributed energy resources (DERs), or with high sensitivity to their inconvenience, to take part in the energy trading via providing incentive to them with relatively higher payment at the same time as reducing the total cost to the energy controller. The proposed scheme is modeled through a two-stage Stackelberg game that describes the energy trading between a shared facility authority (SFA) and EUs in a smart community. A suitable cost function is proposed for the SFA to leverage the generation of discriminate pricing according to the inconvenience experienced by each EU. It is shown that the game has a unique sub-game perfect equilibrium (SPE), under the certain condition at which the SFA's total cost is minimized, and that each EU receives its best utility according to its associated inconvenience for the given price. A backward induction technique is used to derive a closed form expression for the price function at SPE, and thus the dependency of price on an EU's different decision parameters is explained for the studied system. Numerical examples are provided to show the beneficial properties of the proposed scheme.",
keywords = "Smart grid, discriminate pricing, distributed energy resources, energy management, game theory",
author = "Wayes Tushar and Chau Yuen and Bo Chai and Smith, {David B.} and Poor, {H. Vincent}",
note = "Publisher Copyright: {\textcopyright} 2014 IEEE.; 2014 IEEE Global Communications Conference, GLOBECOM 2014 ; Conference date: 08-12-2014 Through 12-12-2014",
year = "2014",
month = feb,
day = "9",
doi = "10.1109/GLOCOM.2014.7037288",
language = "English (US)",
series = "2014 IEEE Global Communications Conference, GLOBECOM 2014",
publisher = "Institute of Electrical and Electronics Engineers Inc.",
pages = "3138--3144",
booktitle = "2014 IEEE Global Communications Conference, GLOBECOM 2014",
address = "United States",
}