A Dynamic Game Approach for Demand-Side Management: Scheduling Energy Storage with Forecasting Errors
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A Dynamic Game Approach for Demand-Side Management: Scheduling Energy Storage with Forecasting Errors Matthias Pilz1
· Luluwah Al-Fagih1
© The Author(s) 2019
Abstract Smart metering infrastructure allows for two-way communication and power transfer. Based on this promising technology, we propose a demand-side management (DSM) scheme for a residential neighbourhood of prosumers. Its core is a discrete time dynamic game to schedule individually owned home energy storage. The system model includes an advanced battery model, local generation of renewable energy, and forecasting errors for demand and generation. We derive a closed-form solution for the best response problem of a player and construct an iterative algorithm to solve the game. Empirical analysis shows exponential convergence towards the Nash equilibrium. A comparison of a DSM scheme with a static game reveals the advantages of the dynamic game approach. We provide an extensive analysis on the influence of the forecasting error on the outcome of the game. A key result demonstrates that our approach is robust even in the worst-case scenario. This grants considerable gains for the utility company organising the DSM scheme and its participants. Keywords Dynamic game · Smart grid · Demand-side management · Energy storage · Battery modelling · Uncertainty · Game theory
1 Introduction Climate change poses a serious threat to the global ecosystem. To limit the increase in global average temperatures, it is critical to restrict greenhouse gas emissions. Currently, burning fossil fuels accounts for the largest share of CO2 emissions by humans into the atmosphere. Renewable energy sources, such as wind and solar, have a much smaller carbon footprint and should be employed instead [16]. Due to the intermittent nature of these sources, their integration into the power system can be a challenging task. Our research investigates possibilities for more efficient and environment friendly access to electricity by means of energy storage and renewable energy generation.
This work was supported by the Doctoral Training Alliance (DTA) Energy.
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Matthias Pilz [email protected] Kingston University London, Penrhyn Road, Kingston upon Thames, UK
Dynamic Games and Applications
The concept rests upon the implementation of a technologically advanced power grid. In contrast to the current power grid, this smart grid features two-way communication and power transfer between the utility company (UC) and individual households [7]. Its decentralised nature is expressed through distributed generation and storage of energy, with individual households capable of doing both. These households are called prosumers (combination of producer and consumer). Moreover, the deployment of smart meters allows households to accurately measure electricity demands in real time. This permits the implementation of demand-side management (DSM) schemes. Within such schemes, the UC incentivises users to avoid consumption during peak hours by means of dynamic pricing tariffs. These tariffs
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