Optimal Power Demand Management by Aggregator Using Mechanism Design Based on Matching Theory

Abstract

This paper deals with optimal power demand management in electricity market. First, we model the behavior of players, consumers, an aggregator, and the market. Each consumer acts to maximize his own profit. Aggregator decides how much power demand each consumer reduces if total power demand exceeds power generation constraint. We propose the way an aggregator decides it using mechanism design and matching theory. Finally, simulation results show that the algorithm can manage power demand and improve consumers' profit.