An Incentive Mechanism to Achieve a Win-win Situation for Both Supply and Demand in the Electricity Market
Aimed at the complex and risk-averse relationship between supply and demand in the electricity market,a new utility-consumer interaction model and its price incentive mechanism is proposed.Based on the electricity market model,the net utility function of risk-averse consumers and function of the social welfare as well as power consumption are established under real-time pricing and flat rate pricing.The proposed extended load transfer mechanism is used to incentive the risk-averse consumers to shift electricity demand from peak hours under endogenous market and exogenous market prices to achieve optimal load transfer,exchange the same consumption cost for more electricity consumption during off-peak hours,and reduce the probability of loss suffered by distribution companies,thereby increasing the economic cake of the entire power world.Experimental results show that the proposed incentive mechanism can protect the electricity consumers and distribution companies from the adverse impact of price fluctuations and increase the social welfare of consumers and profits of distribution companies,which is a win-win solution.
electricity utilityrelationship between supply and demandmathematical modelingincentive mechanismutility functionsocial welfare