Economics at your fingertips  

Psychological insights for incentive-based demand response incorporating battery energy storage systems: A two-loop Stackelberg game approach

Jin Lin, Jun Dong, Xihao Dou, Yao Liu, Peiwen Yang and Tongtao Ma

Energy, 2022, vol. 239, issue PC

Abstract: Demand-side resources play a significant role in enhancing energy efficiency and decarbonization. Performing demand curtailment will psychologically disturb end-customers' comfort and affect decision-making. The penetration of battery energy storage systems (BESSs) in electricity grids introduces another response resource to the grid operator (GO). Therefore, it's important to investigate the effect of different customer psychological factors (CPFs) on incentive-based demand response (IBDR) strategy in the system with diversified response resources including BESSs. Behavioral economics (BE) interprets individual behavior from psychology and provides insights to behavior modeling. Therefore, this paper applied BE to incorporate CPFs, such as the endowment effect and time-discounting effect. Furthermore, to bring the value of CPFs to the system level, an IBDR model considering CPFs and BESSs (CE-IBDR) is proposed by following the Stackelberg game theory. Upon the participation of load aggregators (LAs) and BESSs operator (EO) in IBDR, the model extends two-party hierarchical levels to four-party spinning from the GO, EOs, LAs and end-customers by extending the two-party Stackelberg game to a two-loop Stackelberg game. Results show that without incorporating CPFs into the model will result deviation in interpreting customer behavior. BESSs is preferred reponse resource than load reduction due to the pressure to incentive end-customers with high endowment valuation.

Keywords: Incentive-based demand response; Behavioral economics; Psychological factors; Diversified response resources; Two-loop Stackelberg game; Hierarchical electricity market (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-05-18
Handle: RePEc:eee:energy:v:239:y:2022:i:pc:s0360544221024403