A scoring rule-based truthful demand response mechanism

Demand Response (DR) has been extensively studied as one of the important features of smart grid. The DR strategies can be grouped into two categories, one is incentive-based DR and the other is pricing-based DR. Our work focuses on DR involving both pricing factor and incentive factor using scoring rule. In the literature, several DR mechanisms have been proposed, however, most studies have not focused on the cooperation among consumers although it is important to devise an efficient and stable DR. In this paper, we propose a cooperative demand response mechanism by using a truthful allocation mechanism with scoring rule. The brief ideas of our model are the following: the consumers will be rewarded a discount on the price to measure up how well they predict demand shift. A reward mechanism is based on a strictly proper scoring rule. This mechanism is applied between consumer agents (CA) to Cooperative Demand Response System (CDRS) and Generation Company (GENCO). The proposed mechanism is tested on real data provided by Chubu Electric Power Company and we show that this mechanism is capable of reducing peak demand.