Residential Demand Management Using Individualized Demand Aware Price Policies

TLDR

The study introduces an individualized electricity pricing scheme that incentivizes residential demand management to reduce system peaks while maintaining non‑discriminatory average prices for each user. The demand‑aware price policy leverages advanced metering infrastructure data and is evaluated through a detailed case study of a European distribution network using residential DSM trial data. The approach demonstrates multiple advantages over conventional DSM methods.

Abstract

This paper presents a novel approach to demand side management (DSM), using an "individualized" price policy, where each end user receives a separate electricity pricing scheme designed to incentivize demand management in order to optimally manage flexible demands. These pricing schemes have the objective of reducing the peaks in overall system demand in such a way that the average electricity price each individual user receives is non-discriminatory. It is shown in this paper that this approach has a number of advantages and benefits compared to traditional DSM approaches. The "demand aware price policy" approach outlined in this paper exploits the knowledge, or demand-awareness, obtained from advanced metering infrastructure. The presented analysis includes a detailed case study of an existing European distribution network where DSM trial data was available from the residential end-users.