Modeling Optimal Energy Consumption in Smart Grid Households: Integrating Advanced Strategies with Energy Storage

Abstract

Smart homes delineate optimal energy consumption through the strategic use of energy storage devices, aiming to either balance consumption to present a uniform demand to utility companies or minimize costs by storing energy during off-peak periods and utilizing it during peak times. This dual perspective involves a tradeoff between individual household benefits and the broader utility company incentives. In the context of cost minimization, households primarily benefit from reduced consumption costs but exhibit a highly nonuniform consumption profile. Conversely, the consumption balancing scheme presents advantages for both households and utility companies, fostering a mutually beneficial scenario by curbing consumption costs for the former and ensuring a consistent demand for the latter. The dynamic nature of energy requirements and market prices throughout the day introduces a complex tradeoff for households, involving current consumption, energy storage, and past energy consumption. This intricate tradeoff is modeled through inter-temporal trade considerations, and household consumption preferences are captured using utility functions based on consumer theory. Introducing two distinct utility functions—one tailored for cost minimization and the other for consumption balancing—we aim to maximize these functions subject to budgetary, consumption, storage, and savings constraints, thereby determining the optimal consumption profile.

The optimization problem for a household with energy storage is formulated as a geometric program for consumption balancing, while cost minimization is addressed through a hybrid optimization approach. Simulation results underscore the efficacy of the proposed model, demonstrating an exceptional reduction in the peak-to-average ratio close to unity in the consumption balancing scheme. Furthermore, the cost minimization scheme ensures the least possible electricity bill while concurrently reducing overall consumption costs. This research contributes valuable insights into the dual perspectives of energy consumption optimization within smart grid households, fostering an understanding of the associated tradeoffs and benefits for both consumers and utility providers.