Efficient Buyer Groups with Prediction-of-Use Electricity Tariffs

Valentin Robu, Meritxell Vinyals, Alex Rogers, Nicholas R. Jennings

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)
80 Downloads (Pure)


Current electricity tariffs do not reflect the real costs that a customer incurs
to a supplier, as units are charged at the same rate, regardless of the
consumption pattern. In this paper, we propose a prediction-of-use (POU) tariff that better reflects the predictability cost of a customer. Our tariff asks customers to pre-commit to a baseline consumption, and charges them based on both their actual consumption and the deviation from the anticipated baseline. First, we study, from a cooperative game theory perspective, the cost game induced by a single such tariff, and show customers would have an incentive to minimize their risk, by joining together when buying electricity as a grand coalition. Second, we study the efficient (i.e. cost-minimizing) structure of buying groups for the more realistic setting when multiple, competing POU tariffs are available. We propose a polynomial time algorithm to compute the efficient buyer groups, and validate our approach experimentally, using a large-scale data set of domestic consumers in the UK.
Original languageEnglish
Pages (from-to)4468-4479
Number of pages12
JournalIEEE Transactions on Smart Grid
Issue number5
Early online date27 Jan 2017
Publication statusPublished - Sept 2018


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