The Impact of Social Nudge on System Cost & Revenue Optimization in Local Electricity Market

Abstract

The aim of the paper is to investigate the effect of electricity conservation nudge on the system cost and revenue of prosumers in local electricity market. To motivate the prosumers for energy conservation, a socio economic aspect is considered in terms of social nudge. The mixed integer linear programming problem is modeled considering economics at the center of objective function. The experiment is carried out for 40 prosumers in four different cases including base case. These cases are created based on the empirical reaction of prosumers on receiving the social nudge for electricity saving. The system cost and revenue generated by prosumers are compared for various cases. The highest cost saving of 14.92% is obtained. The results reveal that inclusion of socio economic aspect in local electricity market has tremendous potential to enhance the system operation. Moreover, the propose approach could be very helpful in increasing the willingness of consumers to become a prosumer by participating in local electricity market, and hence improve environmental ecology.