New research shows positives and negatives of electricity generation systems

The supply of electricity is shifting to sustainable and decentralised production from renewable sources; it’s a big change from the 20th century model of central large-scale generation. New systems can use real-time consumption information to leverage consumption and prices, and can incentivise customer behaviour. New research by PhD candidate Markus Peters from Rotterdam School of Management, Erasmus University (RSM) reveals the correct designs and the societal implications of the new systems. Peters’ results provide guidance for sustainable electricity systems, and highlight their potential societal positives and negatives. Peters proposes that Smart Markets and intelligent Information Systems (IS) could alleviate the issues of varying customer demands and generation from sustainable sources. They provide new forms of co-ordination that leverage real-time consumption information and prices. First, Peters proposes and studies a design for Brokers, a novel type of IS for autonomous intermediation in retail electricity markets. Second, he proposes a probabilistic model for representing customer preferences within intelligent IS, studying its performance in electricity tariffs among other tasks. And third, he explores Competitive Benchmarking, a novel research method for effective IS artefact design in complex environments such as Smart Grids, where the social cost of failure is prohibitive. Modern electricity systems are increasingly using renewable sources, and electric vehicles (EVs) pose a number of co-ordination problems that machine learning techniques are well equipped to handle, says Peters. His dissertation Machine Learning Algorithms for Smart Electricity Markets uses computer simulations driven by real data from electricity markets. A particularly innovative element is the idea of ‘competitive benchmarking’ in which international research groups compete against each other to solve problems. Peters uses data generated by pegging electricity trading strategies devised by a dozen international research groups in such a competition. Markus Peters will defend his dissertation in the Senaatszaal at Erasmus University Rotterdam on Friday 13 February 2015. His promoter is Wolf Ketter, Professor of Next Generation Information Systems at RSM. Other members of the Doctoral Committee are Prof. Eric van Heck (RSM); Prof. Tom Heskes (RU Nijmegen); Dr Maytal Saar-Tsechansky (UT Austin); Prof. Patrick Groenen (ES); Dr Oliver Kramer (University of Oldenburg). Dissertation abstract The shift towards sustainable electricity systems is one of the grand challenges of the twenty-first century. Decentralized production from renewable sources, electric mobility, and related advances are at odds with traditional power systems where central large-scale generation of electricity follows inelastic consumer demand. Smart Markets and intelligent Information Systems (IS) could alleviate these issues by providing new forms of coordination that leverage real-time consumption information and prices to incentivize behaviours that remain within the grid's operational bounds. However, the best design for these artefacts, and the societal implications of different design choices is largely unclear. This dissertation makes three contributions to the debate. First, the research proposes and studies a design for Brokers, a novel type of IS for autonomous intermediation in retail electricity markets. Second, Markus Peters proposes a probabilistic model for representing customer preferences within intelligent IS, and it studies its performance in electricity tariff and other choice tasks. And third, Peters proposes and studies Competitive Benchmarking, a novel research method for effective IS artefact design in complex environments like smart grids where the social cost of failure is prohibitive. The results provide guidance on IS design choices for sustainable electricity systems, and they highlight their potential societal positives and negatives. Markus Peters Markus Peters (1978, Germany) studied Computer Science (Data Mining) and Business Administration (Operations Research) at the University of Aachen from 1999 to 2005. Supported by a Fulbright fellowship, he spent the 2003/2004 academic year at Rensselaer Polytechnic Institute in Troy, NY where he obtained a Master’s degree in Information Technology. After his graduation, Markus worked as IT consultant, first for Deloitte’s Business Intelligence (BI) service line and later independently. He advised clients in manufacturing, logistics, marketing, and software development on the design and implementation of enterprise BI systems, and on software engineering topics more generally. Markus entered the graduate program at the Erasmus Research Institute of Management (ERIM) in 2011 to work on Machine Learning algorithms for future retail electricity markets. For this work, he was awarded with the ERIM Master’s degree in Business Research in 2012. Rotterdam School of Management, Erasmus University (RSM) is a top tier European business school and ranked among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. RSM also has offices in the Amsterdam Zuidas business district and in Taipei, Taiwan. www.rsm.nl For more information about RSM or on this release, please contact Olivia Manders, Media Officer on +31 10 408 2028 or by email at manders@rsm.nl.