Demand-Side Management via Distributed Energy Generation and Storage Optimization

Demand-side management, together with the integration of distributed energy generation and storage, are considered increasingly essential elements for implementing the smart grid concept and balancing massive energy production from renewable sources. We focus on a smart grid in which the demand-side comprises traditional users as well as users owning some kind of distributed energy sources and/or energy storage devices. By means of a day-ahead optimization process regulated by an independent central unit, the latter users intend to reduce their monetary energy expense by producing or storing energy rather than just purchasing their energy needs from the grid. In this paper, we formulate the resulting grid optimization problem as a noncooperative game and analyze the existence of optimal strategies. Furthermore, we present a distributed algorithm to be run on the users' smart meters, which provides the optimal production and/or storage strategies, while preserving the privacy of the users and minimizing the required signaling with the central unit. Finally, the proposed day-ahead optimization is tested in a realistic situation.