Date of this Version
IEEE TRANSACTIONS ON SMART GRID, VOL. 5, NO. 6, NOVEMBER 2014 2919
Real-time availability of electricity prices via a smart power grid has a potential bilateral benefit to electricity users and suppliers. The users can reduce their costs by consuming energy during low-price hours and balancing their energy usage during other hours. This in turn benefits energy utility companies by reducing their peak power demand. This article describes an optimal shrinking horizon model for electricity-consuming units based on user preferences. The proposed model optimizes the end user’s electricity cost while meeting preferred comfort levels. The user can set preferences in the model using a tristate flexibility parameter for each electric-power-consuming unit. The electricity price model used in the optimization model is general and covers all pricing schemes in the electricity market today. The model derived can be described by a simple mixed integer linear program and solved by most optimization software in a short time. The most distinguishing characteristics of our proposed model are its simplicity, generality, comprehensibility, and ease of implementation. Simulation results are used to verify the model’s performance in reducing consumer electricity costs and satisfying comfort preferences.