Profit maximization for utility companies in an oligopolistic energy market with dynamic prices

Tiansong Cui, Yanzhi Wang, Hadi Goudarzi, Shahin Nazarian, Massoud Pedram

Research output: Chapter in Book/Report/Conference proceedingConference contribution

7 Scopus citations

Abstract

Dynamic pricing and demand response are the key elements of the smart grid technologies. Utility companies can incentivize electricity customers to schedule their power hungry tasks during off-peak times of the day whereas demand response manages customers' electricity consumption in response to supply conditions or market prices. The reaction of consumers to dynamic prices creates a feedback system in the smart grid that motivates the utility companies to model the consumers' behavior in the process of determining the price. Letting the consumers select their provider of choice among multiple utility companies, may be modeled as a non-cooperative game. In this paper, we consider the process of determining dynamic electricity prices for electricity based on a modified Bertrand Competition Model of consumer behavior and in view of competition among multiple non-cooperative utility companies in an oligopolistic energy market. The proposed method maximizes the conservative estimate on the profit for each utility company. Results also demonstrate the effectiveness of the oligopolistic electrical market in decreasing the electricity cost to consumers.

Original languageEnglish (US)
Title of host publication2012 IEEE Online Conference on Green Communications, GreenCom 2012
Pages86-91
Number of pages6
DOIs
StatePublished - Dec 1 2012
Event2012 IEEE Online Conference on Green Communications, GreenCom 2012 - Piscataway, NJ, United States
Duration: Sep 25 2012Sep 28 2012

Publication series

Name2012 IEEE Online Conference on Green Communications, GreenCom 2012

Other

Other2012 IEEE Online Conference on Green Communications, GreenCom 2012
CountryUnited States
CityPiscataway, NJ
Period9/25/129/28/12

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Communication

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    Cui, T., Wang, Y., Goudarzi, H., Nazarian, S., & Pedram, M. (2012). Profit maximization for utility companies in an oligopolistic energy market with dynamic prices. In 2012 IEEE Online Conference on Green Communications, GreenCom 2012 (pp. 86-91). [6519621] (2012 IEEE Online Conference on Green Communications, GreenCom 2012). https://doi.org/10.1109/GreenCom.2012.6519621