Mechanism design of incentive retail electricity prices

We consider the modern methods of stimulating the users to load leveling during the day, in particular, through the formation of price-dependent demand The article proposes an incentive pricing mechanism based on game-theoretic approaches to modeling the behavior of participants in the electric retail market: the contract theory and the mechanism design. The proposed tariff menu for electricity is incentive -rational, incentive -compatible for user groups with different user preferences, and it has stimulating properties for shifting load from peak zones. The resulting solution implements a separating equilibrium, avoiding the "adverse selection" problem. The effectiveness of this pricing mechanism is demonstrated in the example of a small electric power system using real consumption. Copyright (C) 2022 The Authors.