Development of real time energy pricing schemes that incentivize behavioral changes

Modern energy markets, smart grids and high penetration of Renewable Energy Sources (RES) necessitate the development of modern pricing schemes. Energy Service Providers (ESPs) and end users (consumers) will mutually benefit from the cost reduction and the stability improvement that behavioral changes in the energy consumption can bring. Modern pricing schemes should be able to trigger these behavioral changes. As we argue in this paper, the energy pricing schemes proposed so far (e.g. Real Time Pricing) do not reward the users (energy consumers) that modify their behavior, and are therefore unfair and unable to trigger behavioral changes. Based on this research motivation, we develop a Behavioral Real Time Pricing (B-RTP) scheme, which offers an adjustable level of financial incentives to participating users, rewarding desirable behavioral changes (in the form of their Energy Consumption Curve). Our evaluation results compare RTP and B-RTP, showing that our proposed B-RTP affects the behavior of the participating users much more efficiently than RTP, outperforming the latter in all widely adopted metrics. B-RTP is able to reduce energy consumption by up to 20% compared to RTP without sacrificing users' welfare and ESP profits.