A distributed algorithm for demand-side management: Selling back to the grid

Demand side energy consumption scheduling is a well-known issue in the smart grid research area. However, there is lack of a comprehensive method to manage the demand side and consumer behavior in order to obtain an optimum solution. The method needs to address several aspects, including the scale-free requirement and distributed nature of the problem, consideration of renewable resources, allowing consumers to sell electricity back to the main grid, and adaptivity to a local change in the solution point. In addition, the model should allow compensation to consumers and ensurance of certain satisfaction levels. To tackle these issues, this paper proposes a novel autonomous demand side management technique which minimizes consumer utility costs and maximizes consumer comfort levels in a fully distributed manner. The technique uses a new logarithmic cost function and allows consumers to sell excess electricity (e.g. from renewable resources) back to the grid in order to reduce their electric utility bill. To develop the proposed scheme, we first formulate the problem as a constrained convex minimization problem. Then, it is converted to an unconstrained version using the segmentation-based penalty method. At each consumer location, we deploy an adaptive diffusion approach to obtain the solution in a distributed fashion. The use of adaptive diffusion makes it possible for consumers to find the optimum energy consumption schedule with a small number of information exchanges. Moreover, the proposed method is able to track drifts resulting from changes in the price parameters and consumer preferences. Simulations and numerical results show that our framework can reduce the total load demand peaks, lower the consumer utility bill, and improve the consumer comfort level.