A Cooperative Games Approach for Demand Side Management in Smart Grids

Demand-Side Management (DSM) programs consider the energy consumers as intelligent agents and as key players for system management, gaining importance on the Smart Grid era. In this context, we propose a cooperative approach for the decision-making process of an aggregator that represents a group of residential consumers in a DSM program. The aggregator participates in a day-ahead market and has to decide the best load curves for their consumers in terms of energy costs. Our framework is divided in 3 steps: data submission, scheduling model and cost sharing. In the first one, consumers send to the aggregator their consumption preferences. With that information, the aggregator schedules consumers’ appliances, respecting their preferences and minimizing the total DSM cost, using a mixedinteger scheduling model. In the last step, the aggregator attempts to allocate total program cost to the participants in a fair manner, using the Shapley Value. We test our framework in two random instances, with different appliances, preferences and number of consumers and verify that more flexible participants contribute more to the coalition value, and so forth pay less. Moreover, the peak pricing and inclining block rates models have the capacity to reduce peak-to-average ratio of the system. Keywords—Cooperative Games, Demand-Side Management, Load Scheduling, Residential Power Management, Shapley Value.