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Entropy 2015, 17(10), 6560-6575; doi:10.3390/e17106560

Expected Utility and Entropy-Based Decision-Making Model for Large Consumers in the Smart Grid

1
School of Electrical Engineering, Southeast University, Nanjing 210096, China
2
Jiangsu Key Laboratory of Smart Grid Technology and Equipment, Nanjing 210096, China
3
School of Automation, Nanjing University of Posts and Telecommunications, No. 9, Wenyuan Road, Nanjing 210023, China
*
Author to whom correspondence should be addressed.
Academic Editor: Ali E. Abbas
Received: 19 August 2015 / Revised: 15 September 2015 / Accepted: 21 September 2015 / Published: 25 September 2015
(This article belongs to the Special Issue Entropy, Utility, and Logical Reasoning)
View Full-Text   |   Download PDF [369 KB, uploaded 25 September 2015]   |  

Abstract

In the smart grid, large consumers can procure electricity energy from various power sources to meet their load demands. To maximize its profit, each large consumer needs to decide their energy procurement strategy under risks such as price fluctuations from the spot market and power quality issues. In this paper, an electric energy procurement decision-making model is studied for large consumers who can obtain their electric energy from the spot market, generation companies under bilateral contracts, the options market and self-production facilities in the smart grid. Considering the effect of unqualified electric energy, the profit model of large consumers is formulated. In order to measure the risks from the price fluctuations and power quality, the expected utility and entropy is employed. Consequently, the expected utility and entropy decision-making model is presented, which helps large consumers to minimize their expected profit of electricity procurement while properly limiting the volatility of this cost. Finally, a case study verifies the feasibility and effectiveness of the proposed model. View Full-Text
Keywords: decision-making model; expected utility and entropy; power quality; risk measurement; smart grid decision-making model; expected utility and entropy; power quality; risk measurement; smart grid
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Gao, B.; Wu, C.; Wu, Y.; Tang, Y. Expected Utility and Entropy-Based Decision-Making Model for Large Consumers in the Smart Grid. Entropy 2015, 17, 6560-6575.

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