Demand-side management and its impact on utility and consumers through a game theoretic approach

The modern smart grid facilitate improved demand flexibility, but the self-optimizing nature of participating users will impact the effectiveness and stability of the demand-side management (DSM) program. In this article, the DSM is modeled as a non-cooperative game between users. To ensure the effectiveness and stability of the solution, the existence of Nash equilibrium (NE), its quality and multiplicity are thoroughly investigated for the system model consisting home appliances, distributed energy storage (DES) and dispatchable generation (DPG). The payoff function of the formulated game is not strictly convex due to addition of DES and DPG. Therefore, the proximal decomposition algorithm (PDA) is utilized to get the NE of the game. The convergence of PDA has a strong dependency on system parameters. A rigorous mathematical proof is provided for the condition of convergence of the PDA. The formulated DSM model has been utilized for analyzing its impact on the users as well as distribution utility. In the case of former, its impact on the user's energy bill, profile of DES and DPG, comfort and privacy concern are investigated. In latter case, its impact on system performance parameters such as system peak-to-average ratio (PAR), bus voltage, total system loss, bus voltage deviation index, voltage stability indices, and system reliability parameters are studied. The IEEE-33 bus distribution system is considered for the assessment of the proposed study. The obtained result shows a significant reduction in the energy bill and PAR and improved system performance parameters.