Optimal pricing strategy to reduce fuel consumption in electricity generation with smart meter

Xiaoyan Xu*, Zhuang Ma, Liang Xu, Ye Lu

*Corresponding author for this work

    Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

    1 Citation (Scopus)

    Abstract

    It has been widely recognized that the efficiency of a thermal power system can be improved by technological advancement of electricity generation and manipulation of electricity consumption. The smart meter enables two-way communication between the customers and the electricity generation system. The electricity generation system uses price incentive (i.e. a higher price in the peak period and a lower price in the off-peak period) to shift part of demands from peak to off-peak period under the smart grid environment. Given the fact that fuel consumption in each period is a strictly increasing convex function of power output, we propose two-period and multi-period pricing strategies, and study the effect of different pricing strategies on reducing fuel consumption.
    Original languageEnglish
    Pages (from-to)81-106
    JournalJournal of Systems Science and Systems Engineering
    Volume24
    Issue number1
    Online published4 Feb 2015
    DOIs
    Publication statusPublished - Mar 2015

    Research Keywords

    • convex programming
    • energy consumption
    • Pricing strategy
    • smart meter

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