Energy management via pricing in LQ dynamic games

This paper investigates the use of pricing mechanisms as a means to achieve a desired feedback control strategy among selfish agents in the context of HVAC resource allocation in buildings. We pose the problem of resource allocation as a linear-quadratic game with many dynamically coupled zone occupants(agents) and an uncoupled social planner. The social planner influences the game by choosing the quadratic dependence on control actions for each agent´s cost function. We propose a neighborhood-based simplification of the dynamic game that results in a more realistic and scalable framework than is considered in standard dynamic game theory. In addition, we construct the pricing design problem as a convex feasibility problem and apply our method to an eight zone building model.