Optimal day-ahead pricing with renewable energy for smart grid

Abstract

Thanks to the recent advance on power engineering and wireless communications, the smart grid technology has emerged and users are now capable of deploying renewable energy generators and storage devices at their homes. On the other side, due to the rise of environmental consciousness, electric companies are eager to replace traditional generators with renewable energy. One of the most efficient ways is to provide an electricity buyback scheme for electric companies to encourage users to generate more renewable energy at their homes. Different from the previous works, we consider dynamic pricing with renewable energy buyback as our target scenario. We formulate the dynamic pricing problem as a convex optimization problem and propose a day-ahead time-dependent pricing scheme. The goal of our developed framework is to achieve the maximum benefits for both users and electric companies. To the best of our knowledge, this is one of the very first works to tackle the time-dependent problem with taking the environmental benefit of renewable energy into consideration for smart grid. The numerical results show that our framework can significantly reduce the peak time loading and efficiently balance the system energy provision.