Incentive Compatible Contracting of Thermostats Control for Renewable Energy Integration

23 Pages Posted: 18 Jul 2014

See all articles by Li Xu

Li Xu

Georgia Institute of Technology - The H. Milton Stewart School of Industrial & Systems Engineering (ISyE)

Shijie Deng

Georgia Institute of Technology - The H. Milton Stewart School of Industrial & Systems Engineering (ISyE)

Date Written: March 15, 2013

Abstract

This paper explores the flexibility of thermostatically controlled loads (TCLs) as a way of absorbing the intermittent and variable renewable energy resources. We propose an innovative mechanism, which allows load serving entities (LSEs) to pay incentive rates to customers for the control of thermostats. We apply a game-theoretic framework to model the interactive behavior between LSEs and customers in the contract design and subscription process. As a result, LSEs are able to manipulate subscribers’ thermostat set-points in a certain way that the aggregated TCLs are managed to follow the renewable energy output as close as possible. This is formulated as a linear-quadratic (LQ) tracking problem with inequality constraints and is solved by model predictive control approach. We also study the sensitivity of contract design parameters to the maximum tracking error and total cost.

Keywords: Thermostatically controlled loads, demand response, contract design, model predictive control, renewable energy

Suggested Citation

Xu, Li and Deng, Shijie, Incentive Compatible Contracting of Thermostats Control for Renewable Energy Integration (March 15, 2013). Available at SSRN: https://ssrn.com/abstract=2467363 or http://dx.doi.org/10.2139/ssrn.2467363

Li Xu

Georgia Institute of Technology - The H. Milton Stewart School of Industrial & Systems Engineering (ISyE) ( email )

765 Ferst Drive
Atlanta, GA 30332-0205
United States

Shijie Deng (Contact Author)

Georgia Institute of Technology - The H. Milton Stewart School of Industrial & Systems Engineering (ISyE) ( email )

765 Ferst Drive
Atlanta, GA 30332-0205
United States

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