Dynamic Electricity Pricing to Smart Homes

For the first time in the history of the power industry, because of smart meters, we now have the technology deployed to charge real-time prices for electricity to large populations of consumers. At the same time, homes are becoming smarter with appliances that can autonomously respond to their environment and optimize their performance. Imagining a world in which smart appliances anticipate future changes in electricity prices, in “Dynamic Electricity Pricing to Smart Homes” Adelman and Uçkun develop an approach to evaluating market price–load equilibria when such smart appliances saturate a power utility’s service region on a large scale. Their findings indicate substantial improvements in social welfare as compared with the current status quo of flat prices or popular peak-pricing policies.