Research

Design of incentives for demand response programs

house with a wind turbine
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New technologies introduced with smart grids can allow users to actively participate in electricity markets, e.g., selling energy stored in batteries, or scheduling consumption strategically. Without a proper coordination the selfish behavior of users can degrade the the efficiency of electricity markets (this phenomenon is also known as the tragedy of the commons or the price of anarchy). My research focused on designing economic incentives to coordinate the demand of customers and reduce the market’s efficiency loss. I found that, unlike competitive markets, in regulated markets the efficiency loss can be arbitrarily large. Also, without coordination users can consume at most twice the optimal amount of energy. To mitigate such negative results I leveraged the mechanism design theory (or inverse game theory) to find an economic incentive that improves the efficiency of the market.

Selected publications

  1. C. Barreto, E. Mojica-Nava, and N. Quijano, “Design of mechanisms for demand response programs”, in 52nd ieee conference on decision and control (Dec. 2013), pp. 1828–1833.

  2. E. Mojica-Nava, C. Barreto, and N. Quijano, “Population games methods for distributed control of microgrids”, IEEE Transactions on Smart Grid 6, 2586–2595 (2015).

  3. C. Barreto, E. Mojica-Nava, and N. Quijano, “Incentive mechanisms to prevent efficiency loss of non-profit utilities”, International Journal of Electrical Power & Energy Systems 110, 523–535 (2019).