NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS by Richard H. Thaler and Cass R. Sunstein Penguin Books, 2009, 312 pp, ISBN 978-0-14-311526-7This book is best described formally as a general explanation of and advocacy for libertarian paternalism, a term coined by the authors in earlier publications. Informally, it is about how leaders, systems, organizations, and governments can nudge people to do the things the nudgers want and need done for the betterment of the nudgees, or of society. It is paternalism in the sense that "it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier, and better", (p. 5) It is libertarian in that "people should be free to do what they like - and to opt out of undesirable arrangements if they want to do so", (p. 5) The built-in possibility of opting out or making a different choice preserves freedom of choice even though people's behavior has been influenced by the nature of the presentation of the information or by the structure of the decisionmaking system. I had never heard of libertarian paternalism before reading this book, and I now find it fascinating.Written for a general audience, this book contains mostly social and behavioral science theory and models, but there is considerable discussion of structure and process that has roots in mathematical and quantitative modeling. One of the main applications of this social system is economic choice in investing, selecting and purchasing products and services, systems of taxes, banking (mortgages, borrowing, savings), and retirement systems. Other quantitative social choice systems discussed include environmental effects, health care plans, gambling, and organ donations. Softer issues that are also subject to a nudge-based approach are marriage, education, eating, drinking, smoking, influence, spread of information, and politics. There is something in this book for everyone.The basis for this libertarian paternalism concept is in the social theory called "science of choice", the study of the design and implementation of influence systems on various kinds of people. The terms Econs and Humans, are used to refer to people with either considerable or little rational decision-making talent, respectively. The various libertarian paternalism concepts and systems presented are tested and compared in light of these two types of people. Two foundational issues that this book has in common with another book, Network of Echoes: Imitation, Innovation and Invisible Leaders, that was also reviewed for this issue of the Journal are that 1 ) there are two modes of thinking (or components of the brain) - an automatic (intuitive) process and a reflective (rational) process and 2) the need for conformity and the desire for imitation are powerful forces in human behavior. …

Nudge: Improving Decisions about Health, Wealth, and Happiness

Most of the existing demand-side management programs focus primarily on the interactions between a utility company and its customers/users. In this paper, we present an autonomous and distributed demand-side energy management system among users that takes advantage of a two-way digital communication infrastructure which is envisioned in the future smart grid. We use game theory and formulate an energy consumption scheduling game, where the players are the users and their strategies are the daily schedules of their household appliances and loads. It is assumed that the utility company can adopt adequate pricing tariffs that differentiate the energy usage in time and level. We show that for a common scenario, with a single utility company serving multiple customers, the global optimal performance in terms of minimizing the energy costs is achieved at the Nash equilibrium of the formulated energy consumption scheduling game. The proposed distributed demand-side energy management strategy requires each user to simply apply its best response strategy to the current total load and tariffs in the power distribution system. The users can maintain privacy and do not need to reveal the details on their energy consumption schedules to other users. We also show that users will have the incentives to participate in the energy consumption scheduling game and subscribing to such services. Simulation results confirm that the proposed approach can reduce the peak-to-average ratio of the total energy demand, the total energy costs, as well as each user's individual daily electricity charges.

/pdf/autonomous-demand-side-management-based-on-game-theoretic-2xyp3ii3r8.pdf

Autonomous Demand-Side Management Based on Game-Theoretic Energy Consumption Scheduling for the Future Smart Grid

▶ Addresses a wide range of timely environment, economic and energy topics ▶ A forum to review, analyze and stimulate the development, testing and implementation of mitigation and adaptation strategies at regional, national and global scales ▶ Contributes to real-time policy analysis and development as national and international policies and agreements are discussed and promulgated ▶ 94% of authors who answered a survey reported that they would definitely publish or probably publish in the journal again

Mitigation and Adaptation Strategies for Global Change

This chapter discusses leading problems linked to energy that the world is now confronting and to propose some ideas concerning possible solutions. Oil deserves special attention among all energy sources. Since the beginning of 1981, it has merely been continuing and enhancing the downward movement in consumption and prices caused by excessive rises, especially for light crudes such as those from Africa, and the slowing down of worldwide economic growth. Densely-populated oil-producing countries need to produce to live, to pay for their food and their equipment. If the economic growth of the industrialized countries were to be 4%, even if investment in the rational use of energy were pushed to the limit and the development of nonpetroleum energy sources were also pursued actively, it would be extremely difficult to prevent a sharp rise in prices. It is evident that it is absolutely necessary to pursue actively the development of coal, natural gas, and nuclear power if a physical shortage of energy is not to block economic growth.

World energy outlook

The smart grid is conceived of as an electric grid that can deliver electricity in a controlled, smart way from points of generation to active consumers. Demand response (DR), by promoting the interaction and responsiveness of the customers, may offer a broad range of potential benefits on system operation and expansion and on market efficiency. Moreover, by improving the reliability of the power system and, in the long term, lowering peak demand, DR reduces overall plant and capital cost investments and postpones the need for network upgrades. In this paper a survey of DR potentials and benefits in smart grids is presented. Innovative enabling technologies and systems, such as smart meters, energy controllers, communication systems, decisive to facilitate the coordination of efficiency and DR in a smart grid, are described and discussed with reference to real industrial case studies and research projects.

Demand response and smart grids—A survey

We describe algorithmic enhancements to a decision-support tool that residential consumers can utilize to optimize their acquisition of electrical energy services. The decision-support tool optimizes energy services provision by enabling end users to first assign values to desired energy services, and then scheduling their available distributed energy resources (DER) to maximize net benefits. We chose particle swarm optimization (PSO) to solve the corresponding optimization problem because of its straightforward implementation and demonstrated ability to generate near-optimal schedules within manageable computation times. We improve the basic formulation of cooperative PSO by introducing stochastic repulsion among the particles. The improved DER schedules are then used to investigate the potential consumer value added by coordinated DER scheduling. This is computed by comparing the end-user costs obtained with the enhanced algorithm simultaneously scheduling all DER, against the costs when each DER schedule is solved separately. This comparison enables the end users to determine whether their mix of energy service needs, available DER and electricity tariff arrangements might warrant solving the more complex coordinated scheduling problem, or instead, decomposing the problem into multiple simpler optimizations.

Coordinated Scheduling of Residential Distributed Energy Resources to Optimize Smart Home Energy Services

Interruptible loads represent highly valuable demand side resources within the electricity industry. However, maximizing their potential value in terms of system security and scheduling is a considerable challenge because of their widely varying and potentially complex operational characteristics. This paper investigates the use of binary particle swarm optimization (BPSO) to schedule a significant number of varied interruptible loads over 16 h. The scheduling objective is to achieve a system requirement of total hourly curtailments while satisfying the operational constraints of the available interruptible loads, minimizing the total payment to them and minimizing the frequency of interruptions imposed upon them. This multiobjective optimization problem was simplified by using a single aggregate objective function. The BPSO algorithm proved capable of achieving near-optimal solutions in manageable computational time-frames for this relatively complex, nonlinear and noncontinuous problem. The effectiveness of the approach was further improved by dividing the swarm into several subswarms. The proposed scheduling technique demonstrated useful performance for a relatively challenging scheduling task, and would seem to offer some potential advantages in scheduling significant numbers of widely varied and technically complex interruptible loads.

Scheduling of Demand Side Resources Using Binary Particle Swarm Optimization

http://www.ceem.unsw.edu.au/sites/default/files/documents/simulations.pdf

Simulations of Scenarios with 100% Renewable Electricity in the Australian National Electricity Market

The potential impacts of grid-connected distributed generation and how to address them: A review of technical and non-technical factors

http://ceem.unsw.edu.au/sites/default/files/documents/LeastCostElectricityScenariosInPress2013.pdf

Iain MacGill

Papers

Coordinated Scheduling of Residential Distributed Energy Resources to Optimize Smart Home Energy Services

Scheduling of Demand Side Resources Using Binary Particle Swarm Optimization

Simulations of Scenarios with 100% Renewable Electricity in the Australian National Electricity Market

The potential impacts of grid-connected distributed generation and how to address them: A review of technical and non-technical factors

Least cost 100% renewable electricity scenarios in the Australian National Electricity Market