Best Game Theory

ENERGY
MARKET AND GAME THEORY
Sabita Maharjan
Senior Research Scientist
Simula Metropolitan Center for
Digital Engineering (CDE, SimulaMet),
Associate Professor,
Department o f Informatics,
University o f Oslo, Norway
September 7, 2018

Outline
Game Theory:
Examples and
Introduction
Demand Response
Management and
Energy Market
Discussions
2
Game Theory
STARTING WITH SOME EXAMPLES
Battle of the Sexes
You and your partner are spending

weekend together.
You want to play an online game
Your partner wants to go shopping.
What will you choose?

Selection of Power Sources
Oslo has two power companies A A

and B to provide electricity
– A is stable, but not green
B
– B is green, but not stable
How should a user choose A or B?

Common features in these examples
§ Competitive situations § Decision making

or situations of conflict
§ Concerned more about
§ Multiple players choices than ‘best’ solutions
Background, Basic Concepts and Definitions
GAME THEORY
Game Theory: History
John Von Neuman and John Harsanyi, John Nash
Cournot, Bertrand Oskar Morgensten: and Rienhard Selten
and Stackelberg Game theory became
John Von Were awarded Nobel Prize
Neumann more widely known for Economics
Important
Developments: Nash
equilibrium
1928 1944 1950-‐1960 1994
8
Game theory as a discipline
Game theory is an interdisciplinary field encompassing

economics and mathematics and one that can be
deployed to solve problems for numerous applications
Three key elements in a game
Players Strategies Payoffs
Figure s ource:
http://www.slate.com/articles/sports/sports_nut/2013/11/the_world_chess_championship_is_an_embarrassing_anachronism_it_s_time_to.html
Game theory as a discipline
Game theory is an interdisciplinary field encompassing

economics and mathematics and one that can deployed
to solve problems for numerous applications
Three key elements in a game
Players: Each player can be an individual,

a group or an organization
Strategies: a plan of actions by which a

player has a decision rule to determine
their moves for every possible situation
in a game
Payoff: benefit received for a given

strategy; often termed as utility
Figure s ource:
http://www.slate.com/articles/sports/sports_nut/2013/11/the_world_chess_championship_is_an_embarrassing_anachronism_it_s_time_to.html
Key Elements in “Battle of the Sexes” – an example
Players You and your partner
{Playing video game},

Strategies {going shopping}
Payoff happiness
or
Two types of games
Non-‐cooperative game
A game with competition between individual players.

Only self-‐enforcing (e.g. through credible threats)
alliances (or competition between groups of players)
are possible due to the absence of external means to
enforce cooperative behavior (e.g. contract, law).
Cooperative game
A game with competition between groups of players

due to the possibility of external enforcement of
cooperative behavior (e.g. through contract)
Cooperation generally leads to higher payoffs. For

example: countries cooperate on trading (reduced
tariffs) leading to boost in exports
A classic non-‐cooperative game “Prisoner’s Dilemma”
You and your friend Bill are arrested and

thrown into prison in separate cells.
For three days, neither you nor Bill has told

nothing
………….Then……………
You are told by the police: “We have your

friend Bill and he is starting to talk”
Bill Gates at the age of 19

Should you confess?
Figure source: https://imgur.com/gallery/qnK6woX

How to choose strategy to minimize the number of years in
prison?
Each prisoner is rational and selfish. Namely, he wants to maximize his own
benefit and does not care about the other person’s benefit.
Each prisoner is put in separate room and does not know the other person’s
choice.
When you and Bill can talk, you may not trust even if Bill claims to cooperate.
Prisoner’s Dilemma – payoff matrix
Prisoner’s Dilemma – payoff matrix
Bill
You Confess Don’t Confess
Confess (8, 8) (0, 15)
Don’t Confess (15, 0) (1, 1)
Payoff matrix: each cell is a pair of payoff, the number of years in prison.
– (8,8) è both you and Bill go to prison for 8 years
If both you and Bill confess, you both go to prison for 8 years
If you confess but Bill doesn’t confess, then you are free while Bill goes to prison for
15 years
If both you and Bill remain silent, then you both go to prison for 1 year
Clearly the best result: both keep silent. (Q: Is this doable?)
Prisoner’s Dilemma – shall you confess or not?
Bill
Confess (8, 8) (0, 15)
Don’t Confess (15, 0) (1, 1)
You reason as follows:
• If Bill confess, then you intend to confess to get 8 years instead of 15
years prison
• If Bill does not confess, then you intend to confess to get 0 years instead
of 1 year in prison
• Conclusion: you will confess!

Prisoner’s Dilemma
Bill
Confess (8, 8) (0, 15)
Don’t Confess (15, 0) (1, 1)
Dominant strategy
• Same as you, Bill will also confess! Both get 8 years in prison
• Dominant strategy: for both, confession is a dominant strategy that yields
a better outcome regardless of the opponent’s choice
Nash Equilibrium (NE)
Nash Equilibrium (NE): A combination of

strategies is called a Nash Equilibrium if
neither player has an incentive to change
strategy, given the other player’s choice
mutual best response.
Best response: the strategy which produces

the most favorable outcome, taking other
John Nash, Jr. (1928-‐2015)
players' strategies as given
Both confess is a Nash Equilibrium
Both don’t confess is not a Nash Equilibrium. Why?

Both don’t confess is not a Nash Equilibrium
Bill
Confess (8, 8) (0, 15)
Don’t Confess (15, 0) (1, 1)
Bill will confess, then be in prison from 1 year to zero
If both do not confess , the rival will always want to deviate
Equilibrium need not be efficient. Non-‐cooperative equilibrium in the Prisoner’s
dilemma results in a solution that is not the best possible outcome for the parties.
Individual’s best choice is not the group’s best choice. An individual’s rational
choice may lead to group’s non-‐rational choice
Paradox
What would you and Bill decide if they could negotiate?
Cooperative solution: They could both

have been better off if they had That is exactly why police interrogate
reached the cooperative solution suspects in separate rooms
Recall “Battle of the Sexes” Game
Your girlfriend Your girlfriend

(Computer game) (Shopping)
You (Computer game) (10,5) (3,3)
You (Shopping) (0,0) (5,10)
Two equilibria: both play computer game; both go shopping.

However, either solution is unfair for one of you. (What is the equilibrium?)
Mixed Strategy
Two types of strategies: a pure strategy and a mixed strategy
A pure strategy: at every stage in the game, it specifies a particular move with
complete certainty.
A mixed strategy: applies some randomization to at least one of the moves.
The randomization is a set of fixed probabilities, where the sum of the
probabilities is 1.
Outline
Game Theory:
Examples and
Introduction
Demand Response
Management and
Energy Market
Discussions
24
Pricing Scheme
DEMAND RESPONSE MANAGEMENT
Energy balance: power generation is equal to power
demand
S: power supply from generators
D: power demand from customers
Energy balance point: S=D

S<D S
clearing
price P*
Market
S>D
Energy balance is very important S=D
for energy systems stability and
economy
D
Demand Response Management (DRM) is the main
approach to achieve energy balance
DRM studies the interaction between the supply and the

demand sides by two-‐way flows of power and information.
A typical residential household load during winter
The power load may significantly

vary over time and location
The practical load profile is very

unbalanced
– Residential peak load

(late afternoon) Peak hours are the main
reason for power blackout
– Industrial peak load
(morning)
Household load in winter
(source: www.vreg.be)
Different users have different power demand load
Residential users
Commercial users
Industrial users
The peak load issue
Capacity
(10^9 K Wh)
Nordic usage per type
Source: Nord Pool

Spot
Power infrastructure is designed for peak loads.
Peaks have less than 1% of the time. Reducing peaks can then reduce power
generation and save a lot of money
Demand Response Management (DRM) definition
Demand Response Management (DRM) is defined as changes in

electric usage by end-‐use customers from their normal
consumption patterns in response to changes in the price of
electricity over time, or to incentive payments designed to
induce lower electricity use at times of high wholesale market
prices or when system reliability is jeopardized.
US. Department of Energy
Users will change energy usage behaviors according to different

electricity prices, or incentive payments, or system reliability
Demand Response Management: Objectives
Reduce energy consumption
§ encourage energy-‐aware No DRM

consumption patterns
§ Reduce power generation with DRM

Shift the energy consumption
§ Mitigate power load during

the peak hours
§ Improve grid reliability

Demand Response Management: Approaches
A. Direct load control

Direct Load Control (DLC)
Intelligent Load Control /

B. Intelligent load control
Pricing
Intelligent Load Control / Smart Pricing
Price-‐based program provides users with different prices at different times
When users know about the price changes

§ They will naturally use less electricity when electricity prices are high
§ This will reduce the demand at peak hours
This program indirectly enforces users to dynamically change their energy
usage patterns according to the variance of electricity prices, instead of
directly controlling their loads.
Pricing models
§ Time-‐of-‐Using (ToU) pricing;
§ Real-‐time Pricing (RTP);
§ …..
Time-‐of-‐Use (ToU) Pricing
When users consume energy at

different time intervals of a day, they
are charged at different electricity
prices
ToU pricing is usually released far in

advance, and keeps unchanged for a
long time period.
Examples
§ Ontario, Canada
§ Ausgrid (Australia) § on-‐peak price
§ mid-‐peak price
§ off-‐peak price
Real-‐Time Pricing (RTP)
The electricity price usually varies at

different time intervals of a day (e.g.,
in each hours)
RTP is usually released on an hour-‐

ahead pricing or day-‐ahead pricing
basis
Examples
• Chicago uses hourly-‐based RTP

• In Oslo, you may have RTP from
Sognekraft AS called “Innkjøpspris”
plan (source: http://www.strompris.no)
Home Energy Management System
DEMAND RESPONSE MANAGEMENT
When shall we use appliances/devices at home?
0 6 12 18 23
time
In a house, a smart meter can automatically coordinate
appliances to satisfy the user’s need via ON/OFF control
Power infrastructure
Communications infrastructure
Energy Consumption Scheduling: A simple example
Dishwasher after lunch (Q: why choose time period between 1:30-‐3:30pm?)
works at the lowest price

between “Setup time” and
“Deadline”
Energy Consumption Scheduling is actually not simple since
we have many different appliances
• Non-‐shiftable appliances (e.g., TV, lights,

cooking): must be kept ON for a certain period
of time.
• Shiftable appliances (e.g., washing machines,

Electric Vehicles, and clothes dryers): the operation
task can be shifted to a different time period
• Q: which type of appliances?
refrigerator dishwashers fire alarm

Energy Consumption Scheduling problem
• Q: Given the price values, how should we schedule the power load?
• Scheduler should analyze

– User’s energy consumption needs
– Price values
• The schedule is normally an optimal solution with different preferences
– Minimize the cost of electricity
tradeoff
– Maximize user’s comfort
Energy Consumption Scheduling – parameters
• Let 𝑨 denote the set of appliances

– Washing machines, TV, lights, Dryer, Dishwasher,
EVs (Electric Vehicle)…
• For each appliance 𝒂 ∈ 𝑨, we Load
define a daily energy
consumption scheduling 8
vector 𝒙𝒂 as follows: 𝒙𝟏𝟕
𝟓 =𝟔
6
4 𝟕
𝒙 =2
2 𝟏
– where 𝑯 = 𝟐𝟒 hours 0
time
Energy Consumption Scheduling – operation time
constraint
• For each appliance 𝒂 ∈ 𝑨, the user should indicate:
– 𝜶𝒂 : beginning of the operation time (setup time)
– 𝜷𝒂 : end of the operation time (deadline)
• Operation should be scheduled within [𝜶𝒂, 𝜷𝒂]
Example
• Dish washer after lunch:

setup time 𝜶𝒂 = 12 Noon and
deadline 𝜷𝒂= 6 PM (make
dishes ready for dinner)
Energy Consumption Scheduling – power level constraint
• Each appliance 𝒂 ∈ 𝑨 usually has a maximum power level 𝜸𝒎𝒂𝒙

𝒂
– NISSAN Leaf: charged up to 3.6 kW per hour

• Each appliance 𝒂 ∈ 𝑨 may also have a minimum power level 𝜸𝒎𝒊𝒏
𝒂
Load
• For each appliance 𝒂 ∈ 𝑨 , it is 𝜸𝒎𝒂𝒙 =𝟖
𝒂
required that 8
6 4 ≤ 𝒙78
6 ≤8
𝛾<=>? ≤ 𝑥<A ≤ 𝛾<=<B 4 𝜸𝒎𝒊𝒏 =4
∀𝑎 ∈ 𝐴, ℎ ∈ [𝛼< , 𝛽< ] 2
𝒂
0
time
Energy Consumption Scheduling – total energy constraint
• Let 𝑬𝒂 denote the total energy needed for the operation of appliance 𝒂 ∈ 𝑨
– Bosch WAS20160UC washing machine: 𝑬𝒂 = 0.36
kWh per load
• Given parameters 𝑬𝒂, 𝜶𝒂,
Load
and 𝜷𝒂 , it is required that
8 𝒙𝟏𝟐
𝟓 + 𝒙𝟏𝟑
𝟓 + 𝒙𝟏𝟒
𝟓 + 𝒙𝟏𝟓
𝟓 + 𝒙𝟏𝟔
𝟓 + 𝒙 𝟏𝟕
𝟓 =32
6
4
2
0
time
Cost Minimization
Energy Consumption Scheduling problem to minimize cost:
Load from all appliances

~~~~~ in hour h
Subject to
– where 𝒑𝒉 denotes the price of electricity at hour h. Could be ToU or RTP model
Game theory for the
ENERGY MARKET
Energy market players – power grid operators
Transmission system operators (TSOs)

The TSO operates the transmission assets and
is responsible for the power balance on the
transmission system, e.g., Statnett
Distribution system operators (DSOs)

Power distribution system to operate the
distribution grid and transmit electricity to
residential customers, e.g., Hafslund
Energy market players – sell and buy
Generating company (genco)

The generators own production assets, whose
generation is offered through the electricity market.
Retailer
The retailer buys electricity from the electricity
market, then sell to the end-‐consumers.
Customers
Those eventually use the electricity for any purpose
(from watching TV to heating to industrial production
processes). There is a difference between small and
large consumers, since the latter ones may be allowed
to directly participate in the electricity market.
Energy market players – rule and operate the game
Regulators
Regulators effectively ‘police’ the energy
market. The regulator is responsible for the
market design and its specific rules. It also
monitors the market in order to spot
misbehavior in electricity markets (collusion,
abuse of market power, etc.).
-‐ NVE (The Norwegian Water

Resources and Energy Directorate)
Market operator
Power exchange platform used by market
players to negotiate purchases and sales of
electricity., e.g., Nord Pool
Relationship between market players
Source: Kirschen and Strbac (2004). F undamentals of Power System Economics]
How does electricity market work? – an example
An electricity generator bids an amount of Generator 1

production and a price they will sell
(100,10) Generator 2
(100,20)
Generator 3
Generators submit thier bids (100,30)
simultaneously to the market in the form:
(production, bid price) Demand
Example: Generator 1 with bid (100, 10) market

– Generator 1 wants to sell 100MW clearing price
with price 10$/MW
Market Clearing Price
Three generators send bidding proposals.

– Generator 1 bid (100; 10)
Price ($/MW)
– Generator 2 bid (100; 20) Generator 3
30
– Generator 3 bid (100; 30)
The Market Operator (e.g., Nord Pool) Generator 2
20
organizes the proposals by ascending order
of prices Generator 1
170 MW
Demand
10
The market operator finds the intersection
between the demand line and the supply
curve. This intersection gives the market 100 200 300
clearing price. Production (MW)
Then, market clearing price is 20$/MW. This
price is same for all generators when they are
accepted and sell electricity.
Profits
The accepted bids are the ones in the left

side of demand line: Price ($/MW)
– Generator 1 produces 100MW 30 Generator 3
– Generator 2 produces 70MW

Generator 2
– Generator 3 is not accepted 20
Generator 1 will produce 100MW with price Generator 1
170 MW
Demand
10
20$/MW
– The profit is: 100*(20-‐
10)=1000 100 200 300
Production (MW)
Generator 2 will produce 70MW with price
20$/MW
– The profit is 0
Electricity Market Strategies
Electricity producers play the game using their

price and production. By changing these two
parameters, the market sharing changes.
Cournot strategy: Two firms compete

simultaneously on the quantity of output they
Antoine Augustin Cournot (1801-‐1877)
produce of a homogeneous good.
Bertrand strategy:Two firms compete

simultaneously on the price of a homogenous
good.
Joseph Louis François Bertrand (1822-‐1900)

Cournot Model
Non-‐cooperative: Generators are non-‐cooperative, independently decide their

production (simultaneously).
Rational and selfish: A generator should decide how much electricity to
produce in order to maximize its profit without knowing the decision of the
others.
Electricity price will be determined by the demand curve and supply curve
where the total supply is equal to the total demand.
Cournot Game with Two Generators
Each generator chooses only between two

levels of production Generator A
– High production: 75MW Cost: 10$/MWh Generator B
High: 75MW Cost: 10$/MWh
– Low production: 20MW Low: 20MW High: 75MW
Low: 20MW
The low production may be interpreted as

withholding of capacity with a motivation Demand
to increase prices. If prices increase
sufficiently, the generator can make a
higher profit at the low production.
Cournot Game with Two Generators
Market price is set by the Market

Operator
Price ($/MWh)
– If total power demand < 50MW,
the price will be set as 150$/MWh
150
– If 50 < power demand < 100, the
price will be set as 45$/MWh
– If 100 < power demand < 150MW,
the price will be set as 40$/MWh
45
40
For example, when the total power 95
demand is 95MW, the price is set as
50 100 150
45$/MWh
Production (MW)
Goal: to choose the power production
level (either High or Low production)
that maximizes their profits.
Power Production Matrix
PRODUCTION Generator B
Generator A High Low
High (75, 75) (75, 20)
Low (20, 75) (20, 20)
For (High, High) = (75, 75), the total production is 75+75=150. According to the
price curve, the price is $40.
For (High, Low) = (75, 20), the total production is 95. According to the price
curve, the price is $45.
For (Low, High) = (20, 75), the total production is 95. According to the price
For (Low, Low) = (20, 20), the total production is 40. According to the price
Nash equilibrium
PRICE Generator B
High 40 45
Low 45 150
PROFIT Generator B
High (2250, 2250) (2625, 700)
Low (700, 2625) (2800, 2800)
Nash Equilibrium NE
When both generators choose low levels of production to maximize their
profits. No one has an incentive to change strategy, given the other player’s
choice (mutual best response).
Research Problem
How to maximize revenues for multiple providers
while optimizing consumer demands?
S. Maharjan, Q. Zhu, Y. Zhang, S. Gjessing and T. Basar, "Dependable Demand Response Management in the Smart
62
Grid: A Stackelberg Game Approach," in IEEE Transactions on Smart Grid, vol. 4, no. 1, pp. 120-‐132, March 2013.
Problem formulation
K providers, N consumers:
Consumer side analysis: Provider side analysis:

utility maximization revenue maximization
user parameters
demand of user n from provider k
cost limit of user n
unit price, available power of provider k
63
Proposed Stackelberg game model
The payoffs of providers and Game theory to model

consumers are coupled the interactions
1 2 Providers K
{yk , k K} Stackelberg game

{xn , n N } framework
1 2 Users N
Components of the Stackelberg game

Players Leaders: providers, Followers: consumers
Strategies Providers: unit price, consumers: demand
Payoff Providers: revenue, consumers: utility

64
Stackelberg equilibrium: Closed form solutions
Consumer demands at Theorem 1

Stackelberg equilibrium (SE) Matrix A is invertible and the
P solutions are positive
C n + n k K yk
xn,k = n
Kyk Theorem 2
A unique NE exists in the price
setting game, thereby a unique SE.
Unit prices set by providers at SE
Matrix A
where
65
Numerical results
The increase in a consumer’s cost
limit increases the unit prices too
The demand of user 1

increases as does its cost limit
All other users are affected,

thus, they get less power
66
Games
Non-‐cooperative vs. cooperatives games
One-‐shot games vs. Repeated games
Simultaneous moves vs. Sequential moves games
Games with complete vs. incomplete information
Games with perfect vs. imperfect information
Zero-‐sum vs. non-‐zero sum games
Stochastic games
Evolutionary games
…..
What type of game is

a Stackelberg game?
Outline
Game Theory:
Examples and
Introduction
Demand Response
Management and
Energy Market
Discussions
68
Q&A
DISCUSSIONS
Setting Electricity Price
Oslo has two power companies

A and B to provide electricity
A and B set different electricity

price to attract customers
A B
Any user can freely use either A
or B
How can A or B decide the

electricity price?
If both generators cooperate, they can both charge the monopoly price.
However, each generator has an incentive to reduce its price slightly and
capture more market share, even though it knows that both generators will be
worse off if they both cut price.
Structure similar to that of the prisoner’s dilemma.

Demand response with solar power and wind power
Smart
DRM with solar panel and wind grid
power is difficult to model
Challenges? …
Smart
grid
DRM with energy storage …

Which game theory model should be used?
0 6 12 18 23
time
Demand response applications: Data Centers
• Daily services supported by data

centers
– Gmail
– Facebook
– Dropbox
– DNB (supported by
Green Mountain data
center in Stavanger) Google Data Centre at Mayes
County, Oklahoma
– Q: more?
Why place data centers in Finland or

undersea? Google data center
in Finland
Data centers are huge energy consumers, in
particular cooling systems, and
– pay a lot for electricity bill

– make power grid instable Microsoft undersea
during peak hours data center
Cooling system uses sea water from the Bay

of Finland and reduces energy use
Can DRM help data centers to reduce energy cost?

Allocate computation tasks to locations with cheaper prices
Finland: 241kr/MWh
Oklahoma: 406kr/MWh
4 tasks 10 tasks
Morocco
2 tasks
Singapore: 1450kr/MWh
Google data centers worldwide

References
T. Başar and G. J. Olsder, Dynamic Noncooperative Game Theory, ser. SIAM
Series in Classics in Applied Mathematics. Philadelphia, PA: SIAM, 1999.
H. Singh, “Introduction to game theory and its application in electric power
markets”, IEEE Comp. Applicat. in Power, vol. 12, pp. 18-‐22, Oct. 1999
S. Maharjan, Q. Zhu, Y. Zhang, S. Gjessing and T. Basar, "Dependable Demand
Response Management in the Smart Grid: A Stackelberg Game Approach," in
IEEE Transactions on Smart Grid, vol. 4, no. 1, pp. 120-‐132, March 2013.
R. Deng, Z. Yang, M. Chow and J. Chen, “A Survey on Demand Response in
Smart Grid: Mathematical Models and Approaches,” IEEE Trans. Industrial
Informatics, vol. 11, no. 3, June, 2015
76
Thank you!
Demand Response Pilot Study -‐ Findings on Users Behavior
The largest portion of peak load reduction is attributable to commercial &
industrial customers and wholesale market participants. The growth of peak
load reduction is mainly driven by those customers.
Relatively, residential customers make a modest contribution to peak load

reduction.
Chen and Liu, “From demand response to transactive energy: state of the art”, J. Mod. Power Syst. Clean Energy (2017), 5(1): 10-‐19

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ENERGY

MARKET AND GAME THEORY

September 7, 2018

You and your partner are spending

You want to play an online game

Your partner wants to go shopping.

What will you choose?

Oslo has two power companies A A

How should a user choose A or B?

§ Competitive situations § Decision making

1928 1944 1950-­‐1960 1994

Game theory is an interdisciplinary field encompassing

Three key elements in a game

Players Strategies Payoffs

Game theory is an interdisciplinary field encompassing

Three key elements in a game

Players: Each player can be an individual,

Strategies: a plan of actions by which a

Payoff: benefit received for a given

Players You and your partner

{Playing video game},

A game with competition between individual players.

A game with competition between groups of players

Cooperation generally leads to higher payoffs. For

You and your friend Bill are arrested and

For three days, neither you nor Bill has told

You are told by the police: “We have your

Bill Gates at the age of 19

Figure source: https://imgur.com/gallery/qnK6woX

You reason as follows:

• Conclusion: you will confess!

Nash Equilibrium (NE): A combination of

Best response: the strategy which produces

Both confess is a Nash Equilibrium

Both don’t confess is not a Nash Equilibrium. Why?

Cooperative solution: They could both

Your girlfriend Your girlfriend

You (Computer game) (10,5) (3,3)

You (Shopping) (0,0) (5,10)

Two equilibria: both play computer game; both go shopping.

Two types of strategies: a pure strategy and a mixed strategy

S: power supply from generators

D: power demand from customers

Energy balance point: S=D

DRM studies the interaction between the supply and the

The power load may significantly

The practical load profile is very

– Residential peak load

Source: Nord Pool

Power infrastructure is designed for peak loads.

Demand Response Management (DRM) is defined as changes in

US. Department of Energy

Users will change energy usage behaviors according to different

Reduce energy consumption

§ encourage energy-­‐aware No DRM

§ Reduce power generation with DRM

§ Mitigate power load during

§ Improve grid reliability

A. Direct load control

Intelligent Load Control /

When users know about the price changes

When users consume energy at

ToU pricing is usually released far in

1928 1944 1950-‐1960 1994

§ encourage energy-‐aware No DRM

RTP is usually released on an hour-‐

• Chicago uses hourly-‐based RTP

• Non-‐shiftable appliances (e.g., TV, lights,

-‐ NVE (The Norwegian Water

Joseph Louis François Bertrand (1822-‐1900)

Non-‐cooperative: Generators are non-‐cooperative, independently decide their

One-‐shot games vs. Repeated games

Zero-‐sum vs. non-‐zero sum games