Real-time price savings through price suggestions for the smart grid demand response model

Abstract

The smart grid is the solution for the outdated current state of the power grid. An Energy Provider (EP) and Energy User (EU) are both looking to achieve savings. A Real-Time (RT) Demand Response (DR) pricing mechanism can reduce an EUs' bill and at the same time reduce the overall peak demand and Peak to Average Ratio (PAR) so that EP save their cost. In this paper, we will provide a model that uses a Price Suggestion Unit (pSU) and Price Control Unit (PCU) that provides Real-Time Price suggestions in the SG; we tested the model with a simultaneous perturbation stochastic approximation (SPSA) algorithm considering the threshold energy consumption with real data by using a stochastic iterative process. The EU has a choice to respond to the price suggestion. However, if they are non-responsive still they can still save on their bill in terms of taking advantage of the overall responses of other EUs.