A Comparative Analysis of Real Time and Time of Use Pricing Schemes in Demand Side Management Considering Distributed Energy Resources

Abstract

In this paper, the analysis of time of use and realtime pricing scheme in demand-side management is carried out to demonstrate the impact of pricing scheme on net user savings and system peak reduction. A day ahead optimization problem is formulated in smart grid environment, where users will minimize their electricity bill by generating, storing and shifting their devices to non-peak hours. The resulting problem of optimization is developed as a non-cooperative game among users considering the issue of privacy and comfort by enabling users to choose their scheduling time horizon. The strategy set for the scheduling of time-shiftable devices are discrete hence mixed integer nonlinear programming for real-time pricing and mixed integer linear programming for the time of use pricing scheme has been used to optimize the payoff function of the individual user. This study will provide useful insight for the utility to designing proper tariff scheme for demand-side management.