Optimal Privacy-Enhancing And Cost-Efficient Energy Management Strategies For Smart Grid Consumers

The design of optimal energy management strategies that trade-off consumers’ privacy and expected energy cost by using an energy storage is studied. The Kullback-Leibler divergence rate is used to assess the privacy risk of the unauthorized testing on consumers’ behavior. We further show how this design problem can be formulated as a belief state Markov decision process problem so that standard tools of the Markov decision process framework can be utilized, and the optimal solution can be obtained by using Bellman dynamic programming. Finally, we illustrate the privacy-enhancement and cost-saving by numerical examples.