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Relaying-Assisted Communications for Demand Response in Smart Grid: Cost Modeling, Game Strategies, and Algorithms

The electricity costs of the Utilities are increased with the deviations from the forecasted demand, which are caused by forecast errors and demand fluctuations. The forecast errors are deterministic and can be avoided by the Utilities with long-term operations in electricity markets, whereas the demand fluctuations are stochastic and unavoidable. Demand response can be used for mitigating the demand fluctuations by measuring the electricity usage of consumers and publishing control commands periodically. The performance of demand response is dependent on the quality of communications between the control center and the consumers. The two-way communications are established based on the data aggregator units (DAU) deployed by the Utilities. To improve the quality of communications, we utilize the base stations in telecom networks to forward the metering and control data for the DAUs. The telecom operators maximize their profits and decide the fractions of transmission power allocated for relaying, and then the Utilities select the payments to obtain the corresponding transmission power allocated for relaying. We characterize the electricity costs of the Utilities based on Taguchi loss function and establish a Stackelberg game between the telecom operators and the Utilities. We prove the existence and uniqueness of Nash equilibrium for the follower-level payment selection game and develop an iterative algorithm to search for the equilibrium. Then, the Stackelberg equilibrium can be obtained by a backward induction method. Numerical results show that the cost of the Utilities can be reduced and the profits of the telecom operators are increased.