Demand response scheme based on lottery-like rebates

Galina A. Schwartz, Hamidou Tembine, Saurabh Amin, S. Shankar Sastry

Research output: Chapter in Book/Report/Conference proceedingConference contribution


In this paper, we develop a novel mechanism for reducing volatility of residential demand for electricity We construct a reward-based (rebate) mechanism that provides consumers with incentives to shift their demand to off-peak time. In contrast to most other mechanisms proposed in the literature, the key feature of our mechanism is its modest requirements on user preferences, i.e., it does not require exact knowledge of user responsiveness to rewards for shifting their demand from the peak to the off-peak time. Specifically, our mechanism utilizes a probabilistic reward structure for users who shift their demand to the off-peak time, and is robust to incomplete information about user demand and/or risk preferences. We approach the problem from the public good perspective, and demonstrate that the mechanism can be implemented via lottery-like schemes. Our mechanism permits to reduce the distribution losses, and thus improve efficiency of electricity distribution. Finally, the mechanism can be readily incorporated into the emerging demand response schemes (e.g., the time-of-day pricing, and critical peak pricing schemes), and has security and privacy-preserving properties.

Original languageEnglish (US)
Title of host publication19th IFAC World Congress IFAC 2014, Proceedings
EditorsEdward Boje, Xiaohua Xia
PublisherIFAC Secretariat
Number of pages5
ISBN (Electronic)9783902823625
StatePublished - 2014
Event19th IFAC World Congress on International Federation of Automatic Control, IFAC 2014 - Cape Town, South Africa
Duration: Aug 24 2014Aug 29 2014

Publication series

NameIFAC Proceedings Volumes (IFAC-PapersOnline)
ISSN (Print)1474-6670


Other19th IFAC World Congress on International Federation of Automatic Control, IFAC 2014
Country/TerritorySouth Africa
CityCape Town


  • Lottery
  • Public good
  • Rebate

ASJC Scopus subject areas

  • Control and Systems Engineering


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