Demand Response Management and Smart Pricing in Smart Grids

  • The introduce and development of the smart grids and smart meters have created a great opportunity to better manage the energy demand to integrate renewable energy sources and reduce greenhouse gases, minimise the customers’ bill by smarter consumptions, reduce the cost and maximise the profit for energy generators and retailers, and balance the peak and off-pear usages to relieve the pressure and urgency of power network replacement and upgrade.

    To achieve these objectives and benefits from smart grids and smart meters, the smart market mechanisms for the demand side management needs to be developed and designed, in which the day-ahead and real-time smart pricing is one of the most promising approaches.

    In this talk, a systematic approach of smart pricing for the demand side management is presented:

    • Firstly, at the energy customer’s level, the home energy management system integrated on the smart meters is developed, which enables the customers to best serve their energy need and minimise their bill. For customers who prefer flexible usage of energy without being controlled by the home energy management system, a monitoring system is introduced for the usage behaviour analysis to help these customers to improve the usage efficiency and reduce bill.
    • Secondly, at the energy retail market level, the demand management and pricing optimisation approach is developed, which enables an energy retailer to maximise its  profits and at the same time meets all market,  supply, and peak off-peak ratio  It is shown by using such a smart pricing approach, an energy retailer can reduce the cost of energy consumptions and peak off-peak ratio, and improve its profit without increasing the bills of customers. Therefore achieve the win-win case for both retailers and customers.
    • Thirdly, at the energy wholesale market level, a new wholesale pricing mechanism is developed and designed to cope with the difficult and unpredictable demand pattern led by the new demand management approaches, to ensure the balance and effective integration of demand and supply.

    Finally a list of future research challenges for the demand management and smart pricing are presented and discussed.

 

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