# Review of Intelligent Methods and Their Potential Use towards a Smart Grid Negotiation Framework
## 1 Introduction  
### General Context  
Electricity is a fundamental element of modern civilization, significantly improving human working and living conditions [1]. Historically, the electricity industry, encompassing generation, transmission, distribution and retailing, was integrated vertically operating as a monopoly, often under government ownership. In the United States and some other countries, local electricity providers were privately owned but regulated. Throughout most of the 20 th century this model prevailed until the 1980s, when market reforms were initiated to introduce competition [2], particularly in the generation and retail sectors, aiming to improve efficiency and adaptability to new generation technologies [3]. The structure of a traditional electric grid is presented in Figure 1.  
Figure 1: Traditional Electric Grid. Recent decades have witnessed radical transformations in the electric power industry driven by environmental imperatives and technological advancements. The need for the urgent reduction of CO2 emissions has accelerated the restructuring of the electricity sector [4], leading to the integration of Distributed Energy Resources (DER), Renewable Energy Sources (RES), Energy Storage Systems (ESS) and Information and Communication Technologies (ICT) into Smart Grids (SG). This shift moved the industry away from the traditional vertical models towards more flexible and sustainable energy systems, resulting to an incremental transition of the traditional consumers to prosumers, who actively participate in both the consumption and production of electricity [5,6]. The Smart Grid concept is presented in Figure 2.  
In this new energy landscape, Demand Side Management (DSM) techniques [8], particularly Demand Response (DR) and Real-Time Pricing (RTP--also known as Dynamic Pricing, DP), play a critical role. The aforementioned techniques enhance the operational efficiency, market dynamics, and reliability of power systems by encouraging customer interaction and responsiveness. DR incentivizes consumers to shift their electricity usage to periods of surplus supply, typically through price signals or monetary incentives. When integrated with SG and ESS, DR helps manage the impact of renewable energy variability and increases the stability of the grid [9]. RTP impacts the consumers' behavior through variable price signals that reflect real-time market conditions, contributing further to the grid's efficient operation [10]. DR and RTP techniques have operational and economic benefits. Operational benefits include load shifting as mentioned before, which optimizes the system's operation, peak load reduction, which can alleviate stress on the grid and reduce the need for expensive peaking power plants, and the integration of RES, by aligning electricity consumption with renewable generation patterns, maximizing the utilization of RES. Economic benefits include cost savings for consumers and utilities when the consumers adjust their electricity usage according to price fluctuations, revenue generation by offering incentives to the consumers to earn by curtailing their electricity usage during peak hours or shifting it to times with lower prices, and efficient resource allocation by optimizing the electricity consumption patterns based on price signals, benefitting both consumers and utilities [11]. Furthermore, the integration of DER and ESS within the SG framework improves the grid's flexibility and sustainability. As for flexibility, DER allows to generate power closer to the point of consumption, reducing the need for extensive transmission infrastructure and minimizing transmission losses. They also can be deployed strategically to meet peak  
Figure 2: Smart grid concept [7]. demand periods, reducing the need for peaking power plants. ESS, on the other hand, can store excess energy generated in low-demand periods and release it during high-demand periods, balancing dynamically the supply and demand.