An optimal differential pricing in smart grid based on customer segmentation

Fanlin Meng, Behzad Kazemtabrizi, Xiao Jun Zeng, Chris Dent

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

In smart grids, dynamic pricing (e.g., time-of-use pricing (ToU), real-time pricing (RTP)) has recently attracted enormous interests from both academia and industry. Although differential pricing has been widely used in retail sectors such as broadband and mobile phone services to offer 'right prices' to 'right' customers, existing research in smart grid retail pricing mainly focus on an uniform dynamic pricing (i.e. all customers are offered at the same prices). In this paper, we take the first step towards an optimal differential pricing for smart grid retail pricing based on customer segmentation. A differential pricing framework is firstly presented which consists of customer segmentation analysis, and a two-level optimal differential pricing problem between the retailer and each customer group. At the upper level, a pricing optimization problem is formulated for the retailer while at the lower-level, an optimal tariff selection problem is formulated for each customer group (e.g., price sensitive, price insensitive) to minimize their bills. By comparing with a benchmarked uniform ToU, simulation results confirmed the feasibility and effectiveness of our proposed optimal differential pricing strategy.

Original languageEnglish
Title of host publication2017 IEEE PES Innovative Smart Grid Technologies Conference Europe (ISGT-Europe)
Subtitle of host publicationTorino, Italy 26-29 September 2017
Place of PublicationNew Jersey
PublisherIEEE
Pages1-6
Number of pages6
ISBN (Electronic)9781538619537
DOIs
Publication statusPublished - 18 Jan 2018
Event2017 IEEE PES Innovative Smart Grid Technologies Conference Europe, ISGT-Europe 2017 - Torino, Italy
Duration: 26 Sept 201729 Sept 2017

Publication series

Name2017 IEEE PES Innovative Smart Grid Technologies, Europe
PublisherIEEE
Volume2017

Conference

Conference2017 IEEE PES Innovative Smart Grid Technologies Conference Europe, ISGT-Europe 2017
Country/TerritoryItaly
CityTorino
Period26/09/1729/09/17

Keywords

  • customer segmentation
  • demand response
  • Differential pricing
  • smart metering data

Fingerprint

Dive into the research topics of 'An optimal differential pricing in smart grid based on customer segmentation'. Together they form a unique fingerprint.

Cite this