Peak demand periods, which typically occur over several hot summer days, have been known as one of the reasons for high electricity tariffs as well as underutilised and expensive grid infrastructures. This project provides powerful analytical frameworks that allow electricity retailers or demandresponse aggregators to manage the peak electricity demand periods.
Underpinning this is an understanding that distribution of energy is as important as its generation. Recent developments in renewable energy, distributed power generation, and information technologies, motivate a transformational change of the existing power grid. The question of how to provide the right incentives to power generators, distributors and users to facilitate a more efficient resilient, and cost effective power grid has yet to be answered.
The problem at hand is clearly multifaceted, and concerns economists, engineers, policy experts and environmental scientists. Hence, the project aims to bring together the expertise of researchers from these diverse fields that have an interrelating interest in mechanism-design for optimal allocation of scarce resources.
In this project, advanced tools from mechanism design theory and game theory have been utilised to tackle the peak demand problem.
Project outcomes include:
- efficient tools for electricity retailers to efficiently manage the electricity demand and also to affect the electricity price during peak demand periods;
- development of novel game theoretic mechanisms modeling actions and incentives of actors participating in the smart grid environment including regulators, generators, distributors, and users;
- creating a synthesis of economical and engineering aspects of the problem using analytical methods.
This project is aligned with the Melbourne School of Engineering’s Future Grid Laboratory and the Faculty of Business and Economics Centre for Market Design.