Toward a consumer-centric grid: A behavioral perspective

Walid Saad, Arnold L. Glass, Narayan B. Mandayam, H. Vincent Poor

Research output: Contribution to journalReview articlepeer-review

43 Scopus citations

Abstract

Active consumer participation is seen as an integral part of the emerging smart grid. Examples include demand-side management programs, incorporation of consumer-owned energy storage or renewable energy units, and active energy trading. However, despite the foreseen technological benefits of such consumer-centric grid features, to date, their widespread adoption in practice remains modest. To shed light on this challenge, this paper explores the potential of prospect theory, a Nobel-prize winning theory, as a decision-making framework that can help understand how risk and uncertainty can impact the decisions of smart grid consumers. After introducing the basic notions of prospect theory, several examples drawn from a number of smart grid applications are developed. These results show that a better understanding of the role of human decision making within the smart grid is paramount for optimizing its operation and expediting the deployment of its various technologies.

Original languageEnglish (US)
Article number7426734
Pages (from-to)865-882
Number of pages18
JournalProceedings of the IEEE
Volume104
Issue number4
DOIs
StatePublished - Apr 1 2016

All Science Journal Classification (ASJC) codes

  • Electrical and Electronic Engineering

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