Narayan Mandayam and Arnold Glass (Psychology) received an NSF EAGER Award to explore new directions in prosumer-centric smart grid management. This is a collaborative proposal between Rutgers, Princeton and Virginia tech. The award was 300K and our share is 100K. Please see details below.
EAGER: Renewables: Collaborative Research: Foundations of Prosumer-Centric Grid Energy Management
PI: Narayan Mandayam, Co-PI: Arnold Glass (Psychology)
The realization of the vision of a smart power grid in which a significant portion of energy stems from renewable sources and other prosumer-owned devices (a prosumer is a consumer who can take the dual role of seller and a buyer of electricity) is contingent on large-scale, active prosumer participation in energy management. However, just because such participation can yield significant technological and societal benefits, it cannot be assumed that prosumers will actually become fully involved in the smart grid. Empirical data shows that, despite its exciting prospects, the widespread adoption of the smart grid has been hindered by modest user participation. Motivated by emerging grid scenarios, this project employs the mathematical framework of prospect theory, a seminal contribution to behavioral economics that won the Nobel Prize, to study grid energy management, as well as understanding and overcoming barriers to user participation. Prospect theory provides a methodology for understanding peopleâ€™s economic choices based on their actual behavior and their assessment of potential gains and losses versus the assessed levels of risk. The interdisciplinary research team of engineers and a cognitive psychologist will provide a fundamentally new understanding of the role of prosumers in the smart grid and study: 1) new fundamental results on the impact of prosumer behavior on energy management, 2) prosumer-centric, sustainable energy management schemes and associated pricing mechanisms that optimize grid operation by tightly integrating the effect of prosumer behavior and subjective utility perceptions via novel prospect theory notions, 3) grid-aware energy management that accounts for grid dynamics and uncertainty due to factors such as renewables, and 4) real-life cognitive psychology experiments that will yield new, realistic behavioral models for smart grid prosumers. The results of the project will advance multiple disciplines including power systems, game theory, economics, and cognitive psychology. The unique marriage of smart grid design and cognitive psychology will offer an innovative educational opportunity to involve students from both engineering and psychology via participation in behavioral experiments.