Optimal Real-Time Pricing Algorithm Based on Utility Maximization for Smart Grid

In this paper, we consider a smart power infrastructure, where several subscribers share a common energy source. Each subscriber is equipped with an energy consumption controller (ECC) unit as part of its smart meter. Each smart meter is connected to not only the power grid but also a communication infrastructure such as a local area network. This allows two-way communication among smart meters. Considering the importance of energy pricing as an essential tool to develop efficient demand side management strategies, we propose a novel real-time pricing algorithm for the future smart grid. We focus on the interactions between the smart meters and the energy provider through the exchange of control messages which…