1. Toward a Consumer-Centric Grid: A Behavioral Perspective
- Author
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H. Vincent Poor, Narayan B. Mandayam, Arnold L. Glass, and Walid Saad
- Subjects
Expediting ,Smart grid ,Risk analysis (engineering) ,Prospect theory ,Computer science ,Software deployment ,Energy management ,Electrical and Electronic Engineering ,Grid ,Consumer behaviour ,Efficient energy use - Abstract
Active consumer participation is seen as an integral part of the emerging smart grid. Examples include demand-side management programs, incorporation of consumer-owned energy storage or renewable energy units, and active energy trading. However, despite the foreseen technological benefits of such consumer-centric grid features, to date, their widespread adoption in practice remains modest. To shed light on this challenge, this paper explores the potential of prospect theory, a Nobel-prize winning theory, as a decision-making framework that can help understand how risk and uncertainty can impact the decisions of smart grid consumers. After introducing the basic notions of prospect theory, several examples drawn from a number of smart grid applications are developed. These results show that a better understanding of the role of human decision making within the smart grid is paramount for optimizing its operation and expediting the deployment of its various technologies.
- Published
- 2016
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