Futures/Option Electric Power Pricing in Smart Grid Using Game Theory and Hybrid AMI Based on Weather Clearness

Recently, due to the activation of internet networks and development of wireless systems that can establish a network independently, the technical fields where the game theory plays an important role are increasing continuously, solving the decision-making problems in the computer networks. Meanwhile, the development speed of Smart Grids, Micro Grids and IoT-related technologies is also increasing backed by the major IT companies to provide more efficient power management and control services. The game theory used in these technologies allow consumers to check their power usage patterns for better consumption behavior. The power companies use the game-theoretic approaches in their applications and one such example is the ‘Demand Response’ technology for the Smart Grids, which informs hourly or periodic dynamic prices to the power users. Future energy shortage is a global problem and an inevitable consequence for the Republic of Korea as well. Without the ground-breaking power sources and technologies being available, it is expected that the power companies will offer more segmented power prices depending on the time zones and seasons to save power or to reduce the energy consumption rate. Thus, in this paper, we present a game theory-based pricing approach in a Smart Grid and a hybrid AMI which considers the weather conditions. With this AMI, the future, spot and option prices will be determined based on the decision-making process and by applying the process to the Smart Meter System, an efficient monitoring and management will become possible.