Title

A hybrid-learning based broker model for strategic power trading in smart grid markets

RIS ID

111558

Publication Details

Wang, X., Zhang, M. & Ren, F. (2017). A hybrid-learning based broker model for strategic power trading in smart grid markets. Knowledge-Based Systems, 119 142-151.

Abstract

Smart Grid markets are dynamic and complex, and brokers are widely introduced to better manage the markets. However, brokers face great challenges, including the varying energy demands of consumers, the changing prices in the markets, and the competitions between each other. This paper proposes an intelligent broker model based on hybrid learning (including unsupervised, supervised and reinforcement learning), which generates smart trading strategies to adapt to the dynamics and complexity of Smart Grid markets. The proposed broker model comprises three interconnected modules. Customer demand prediction module predicts short-term demands of various consumers with a data-driven method. Wholesale market module employs a Markov Decision Process for the one-day-ahead power auction based on the predicted demand. Retail market module introduces independent reinforcement learning processes to optimize prices for different types of consumers to compete with other brokers in the retail market. We evaluate the proposed broker model on Power TAC platform. The experimental results show that our broker is not only is competitive in making profit, but also maintains a good supply-demand balance. In addition, we also discover two empirical laws in the competitive power market environment, which are: 1. profit margin shrinks when there are fierce competitions in markets; 2. the imbalance rate of supply demand increases when the market environment is more competitive.

Grant Number

ARC/DP140100974

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