Benefits to consumers under RTP with a statistical demand model

Abstract

In this paper we address the distributional effects of costs and benefits of real-time pricing (RTP) schemes in future smart grid system. We first present an optimal RTP scheme which is based on two-layer optimization processes performed separately on consumer side and retailer side of an electricity network for social welfare maximization. We further proceed to classify consumers based on their load profiles and level-of- participation in demand response program under RTP scheme. The economic benefits of the RTP scheme to different types of consumers are analyzed and compared with those of flat pricing and time-of-use (ToU) pricing schemes. Numerical simulation results demonstrate that the proposed RTP scheme brings economic benefits to all consumers in particular those who are responsive to the price incentive provided by the RTP scheme.