Optimal privacy-cost trade-off in demand-side management with storage

Demand-side energy storage management is studied from a joint privacy-energy cost optimization perspective. Assuming that the user´s power demand profile as well as the electricity prices are known non-causally, the optimal energy management (EM) policy that jointly increases the privacy of the user and reduces his energy cost is characterized. The backward water-filling interpretation is provided for the optimal EM policy. While the energy cost is reduced by requesting more energy when the prices are lower, energy consumption privacy is achieved by a smoother output load. It is shown that both gains can be achieved by using a limited size storage unit. The optimal trade-off between the user´s privacy and energy cost is characterized, and the impact of the size of the storage unit and the resolution of the smart meter readings on this trade-off is studied.