Optimal Demand Adjustment of Consumers with Various Appliances Using Dynamic Pricing

Abstract

This paper deals with a demand adjustment problem of each consumer having appliances by an aggregator based on optimal pricing in a day-ahead electricity market. In this paper, we model consumers, generators, and aggregators and design a market mechanism, where they act to maximize their own profit based on the power price and decide the electricity supply and demand. The dual decomposition is applied to the market problem to maximize the social welfare, where the proposed algorithm decides an electricity price based on the exchange of information among market participants to solve each distributed problem for improving convergence. In addition, the convergence of this proposed method is proven using Lyapunov's stability theorem. Finally, simulation results show that matching of supply and demand is achieved, while satisfying constraints on the consumption amount and the use time of each appliance, and the price determined using proposed price update algorithm converges to a certain price.

Keywords

• optimal pricing
• demand response
• aggregator