Quantifying Device Flexibility With Shapley Values in Demand Side Management

The value of flexibility in demand side management (DSM) is a measure that is hard to quantify. However, having such a value is important in various areas, from determining research directions to cost allocation and writing policy. In this work, we propose a method to determine the value of flexible assets using average marginal contributions, based on the Shapley value. We apply this method in a smart home peak shaving DSM context. Our results show that the Shapley value of an electric vehicle (EV) is the largest in this context, 27% larger than the Shapley value of the runner-up, a battery energy storage system. This highlights that when doing research or writing policy for DSM in the residential sector, EVs are the most important area to focus on. Additionally, we show that if the right device configurations are chosen, there can be strong synergy between devices, i.e., the flexibility valuation of combinations of devices can be higher than the sum of their individual contributions. The results of this work provide intuition for which device configurations and combinations can achieve such synergy. The presented framework can not only be used to valuate flexible assets in DSM in the context of a smart home, but can also be applied to larger scale energy systems.