Mechanism Design Approach for Energy Efficiency

In a real world, there exist different energy sources that provide the required energy (photovoltaic (PV), nuclear, hydroelectric, etc). Therefore, the trend of the amount of available energy is constantly changing by the day. At the other hand, the consumption of a community of users depends on users’ lifestyles, day of the week, season, ecc. In the literature, this kind of problem is called demand side management (DSM), that is the modification of consumer demand for energy through various methods such as financial incentives and behavioral change through education. During my research activities, I am developing a model that is able to manage the energy demand in order to reach an efficiency goal: consuming the whole produced energy. The model takes into account the social goal that is represented by the optimal use of the energy produced. This can be achieved by behavioural changes induced in the users modifying dynamically the energy cost per hour. In this work, I want to deploy a game-theoretic approach in order to tackle this DSM issue. The objective is to modify users’ behavior in order to avoid consumption peaks and to involve the users into a more careful energy consumption. The mechanism will be able to drive users in shifting energy consumptions, by selecting an appropriate energy pricing scheme considering the amount of available energy according to the energy consumption preference of every users. This result could be achieved through an incentive approach, for instance to give more expensive energy rate for specific peak hours. The aim is to develop a mechanism (in a game theoretic sense), that want to pursuit a global objective (the optimal energy use) through the independent maximization of single user’s utility, according to the definition of a social choice function and a payment scheme.