A Mechanism Design Approach for Coordination of Thermostatically Controlled Loads

Abstract: This paper focuses on the coordination of a population of thermostatically controlled loads (TCLs) with unknown parameters to achieve group objectives. The problem involves designing the device bidding and market clearing strategies to motivate self-interested users to realize efficient energy allocation subject to a peak energy constraint. This coordination problem is formulated as a mechanism design problem, and we propose a mechanism to implement the social choice function in dominant strategy equilibrium. The proposed mechanism consists of a novel bidding and clearing strategy that incorporates the internal dynamics of TCLs in the market mechanism design, and we show it can realize the team optimal solution. A learning scheme is proposed to address the unknown load model parameters. Numerical simulations are performed to validate the effectiveness of the proposed coordination framework.