Designing incentive compatible contracts for effective demand management

Fahrioglu M., Alvarado F.

IEEE TRANSACTIONS ON POWER SYSTEMS, cilt.15, sa.4, ss.1255-1260, 2000 (SCI-Expanded) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 15 Sayı: 4
  • Basım Tarihi: 2000
  • Doi Numarası: 10.1109/59.898098
  • Dergi Adı: IEEE TRANSACTIONS ON POWER SYSTEMS
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.1255-1260
  • Anahtar Kelimeler: demand management, game theory, load curtailment, load interruption, mechanism design, system security
  • Orta Doğu Teknik Üniversitesi Kuzey Kıbrıs Kampüsü Adresli: Hayır

Özet

Demand relief from customers can help a utility (or any "Load Serving Entity") solve a variety of problems. There exist all sorts of different demand management programs that utilities use. A critical issue is the incentive paid to the customer to participate in demand management programs and provide load relief. The utility has to design cost effective yet attractive demand management contracts, The main goal is to get load relief when needed, and to do so in a cost effective way. Customers sign up for programs when the benefits they derive in the form of up front payments, demand discounts and interruption payments exceed their cost of interruption. In order to design such contracts, mechanism design with revelation principle is adopted from Game Theory and applied to the interaction between a utility and its customers. The idea behind mechanism design is to design an incentive structure that encourages customers to sign up for the right contract and reveal their true value of power (and thus, the value of power interruptibility).