A bilevel approach for demand side management in the energy field

Pricing models for demand side management methods are traditionally used to control electricity demand which became quite irregular recently and resulted in inefficiency in supply. In this work, we propose bilevel pricing models to explore the relationship between energy suppliers and customers who are connected to a smart grid. The smart grid technology allows customers to keep track of hourly prices and shift their demand accordingly, and allows the provider to observe the actual demand response to its pricing strategy. Moreover, we assume that the smart grid optimizes the usage of a renewable energy generation source and a storage capacity.