2 research outputs found
Integrating Energy Storage into the Smart Grid: A Prospect Theoretic Approach
In this paper, the interactions and energy exchange decisions of a number of
geographically distributed storage units are studied under decision-making
involving end-users. In particular, a noncooperative game is formulated between
customer-owned storage units where each storage unit's owner can decide on
whether to charge or discharge energy with a given probability so as to
maximize a utility that reflects the tradeoff between the monetary transactions
from charging/discharging and the penalty from power regulation. Unlike
existing game-theoretic works which assume that players make their decisions
rationally and objectively, we use the new framework of prospect theory (PT) to
explicitly incorporate the users' subjective perceptions of their expected
utilities. For the two-player game, we show the existence of a proper mixed
Nash equilibrium for both the standard game-theoretic case and the case with PT
considerations. Simulation results show that incorporating user behavior via PT
reveals several important insights into load management as well as economics of
energy storage usage. For instance, the results show that deviations from
conventional game theory, as predicted by PT, can lead to undesirable grid
loads and revenues thus requiring the power company to revisit its pricing
schemes and the customers to reassess their energy storage usage choices.Comment: 5 pages, 4 figures, conferenc