EnergyCoupon: A Case Study on Incentive-based Demand Response in Smart Grid

In competitive electricity market systems such as Texas, Load Serving Entities (LSEs) purchase energy in a wholesale market and then sell it in a retail market. In wholesale market, LSEs see dynamic real-time prices, whereas in retail market, LSEs typically provide flat rate contracts to end-consumers. An intuitive idea to induce savings for LSEs is to shift loads from high-price hours to low-price hours of the wholesale market by incentive-based demand response. We design and implement such a system, called EnergyCoupon, to provide coupon incentives to users and collect their responses. We run the experiment over household participants through the summer of 2016. The experimental results suggest behavioral changes in energy consumption can be achieved, which could be beneficial to both end users and LSEs. This paper presents the system set up, key algorithms, as well as experimental results analysis.