Nudge-Based Demand Response (NBDR): Employing Behavioral Economics Principles Towards Optimal Operation of Multi-Carrier Energy Systems

Nudge theory as a behavioral science concept proposes positive reinforcement and indirect suggestions to achieve non-forced compliance and influence group or individual motivations and decisions. Nudge theory has different applications in business, health, politics, protection of public goods and many other aspects and has become a powerful tool in guiding people's behavior. In addition, in the energy aspect, one of the most important fields that has a great potential in integration with behavioral economics as well as nudge concept is demand side management. Hence, this research employs behavioral economics principles in the demand response (DR) program, which is called nudge-based DR (NBDR). The proposed framework aims at realizing positive real-world reinforcement in DR modeling and implementation based on households/customers decision-making. The proposed mixed integer liner programming (MILP) model integrates into a multi-carrier energy system operation framework implemented on the IEEE 33-bus distribution test system including 33 clusters of households. Simulation results show significant changes in load shape, operation cost and lost load.