Strategies for energy pricing to modify energy consumption using reward process functions

ABSTRACT The consumption pattern in the energy sector could be modified by adopting innovative strategies on both sides of energy supply and energy demand. The energy consumption could be given a great cut by relying on research-based strategies, target-oriented investments, and modern technologies. Also an effective way to reduce the energy consumption is efficient management of energy demand, which has many implications including fair pricing. By fair pricing or fairer pricing we mean each consumer to pay according to their amount of consumption on a progressive trend—the more energy the unit uses, the more it has to pay on average. A way to get closer to fair pricing is applying the nonlinear reward functions. The present article seeks to calculate, the mean of consumption cost till the time t, and , the mean time of passing from a certain price level to the next price level of z, with as a reward process and as the nonlinear reward function.