Redefining the Market Power of Small-Scale Electricity Consumers through Consumer Social Networks

Abstract

Energy markets have undergone important changes at the conceptual level over the last years. Decentralized supply, small-scale production and smart grid optimization and control are the new building blocks. These changes offer substantial opportunities for all energy market stakeholders, some of which however, remain largely unexploited. Small-scale consumers, as a whole, account for significant amount of energy in current markets (up to 40%), as individuals though their consumption is trivial, and their market power practically non-existent. Thus, it is necessary to assist small-scale energy market stakeholders combine their market power. Within the context of this work we propose Consumer Social Networks (CSNs) as a means for achieve the objective. We present a simulation environment for the creation of CSNs and provide a proof of concept on how CSNs can be formulated based on various criteria. Each cluster in a CSN may be treated as a nontrivial stakeholder with specific characteristics that can actively affect energy market pricing policies. We also show provide an indication on how demand response programs designed based on targeted incentives may lead to energy peak reductions.