Pricing Information in Smart Grids: A Quality-Based Data Valuation Paradigm

Abstract

With the development of Internet technology, information has become an increasingly important asset for the operation and planning of power systems. However, the existing studies and practices pay little attention to information value evaluation, i.e., the potential for information to be converted into actual economic benefits. To this end, this paper designs an information market framework and proposes a generalized information valuation model to help price data in smart grids efficiently. Here we analyze the information value of photovoltaic (PV)-related data in a power system operation problem. Specifically, we examine how additional meteorological and PV power data help to improve day-ahead forecasting accuracy, thus enhancing unit commitment (UC). In this paper, information quality is captured by two indices of a set of PV-related data, i.e., Shannon entropy and non-noise ratio. Then a neural network-based engine is employed to predict day-ahead hourly solar power on the premise of input datasets with different information quality. Here we define forecasting accuracy as information utility, and discover an exponential relationship between such utility and information quality. Finally, a two-stage stochastic UC model is formulated to quantify the contributions of different PV-related datasets, in which real-time solar power deviation is penalized. In this instance, the economic value of PV-related data is measured as the operational cost reduction induced by forecasting accuracy improvement, which we find can be estimated by information quality. Case studies based on the IEEE 30- and 118-bus systems validate the effectiveness of the proposed paradigm and method.