Modeling and Design of Real-Time Pricing Systems Based on Markov Decision Processes

A real-time pricing system of electricity is a system that charges different electricity prices for different hours of the day and for different days, and is effective for reducing the peak and flattening the load curve. In this paper, using a Markov decision process (MDP), we propose a modeling method and an optimal control method for real-time pricing systems. First, the outline of real-time pricing systems is explained. Next, a model of a set of customers is derived as a multi-agent MDP. Furthermore, the optimal control problem is formulated, and is reduced to a quadratic programming problem. Finally, a numerical simulation is presented.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Kobayashi, K. , Maruta, I. , Sakurama, K. and Azuma, S. (2014) Modeling and Design of Real-Time Pricing Systems Based on Markov Decision Processes. Applied Mathematics, 5, 1485-1495. doi: 10.4236/am.2014.510141.

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