Conversational Demand Response: Bidirectional Aggregator-Prosumer Coordination through Agentic AI

Effective demand response in smart microgrids requires prosumers to cooperate voluntarily under strategic self-interest, a coordination problem structurally equivalent to a repeated Prisoner's Dilemma on a social network. This paper presents a multi-agent simulation in which a Large Language Model (LLM) Influence Compiler issues structured demand-response directives to a population of heterogeneous prosumer agents, each governed by a hybrid decision architecture combining game-theoretic base probability (derived from payoff history, neighbour imitation, and exploitation memory) with LLM narrative evaluation of incoming coordination signals. The hybrid architecture resolves a key methodological challenge: LLMs aligned via Reinforcement Learning from Human Feedback (RLHF) exhibit strong cooperation bias when used as direct decision-makers, producing flat dynamics regardless of grid conditions. By separating strategic reasoning from grounded narrative evaluation, the model generates realistic prosumer behaviour across six personality archetypes, with baseline cooperation near 50% and clear differentiation under influence. Compiled structured directives achieve 33.3% demand-curtailment cooperation versus 27.0% for unstructured messaging and 28.0% for a no-intervention baseline ($Δ_\mathrm{comp} = +0.063$), with the advantage preserved across both grounded and idealized agent substrates ($Δ= +0.083$) and across all resistance levels ($R = 0.1$ to $0.7$). Hub-targeted dissemination via high-centrality network nodes outperforms peripheral or random targeting, confirming that grid topology provides mechanistic amplification independent of message content. These results suggest that structured LLM compilation, grounded agent reasoning, and network-aware targeting are complementary design principles for scalable, interpretable demand-response coordination in smart-city energy systems.

Residential virtual power plants (VPPs) can provide grid flexibility by shifting household demand, but physical flexibility becomes dependable capacity only when residents authorize a plan and the promised response is delivered. Existing benchmarks evaluate control but omit event-specific authorization. We present EnergyBridge, a benchmark and agent framework connecting capacity reporting, household authorization, and physical execution. It combines region-specific EnergyPlus environments for Tianjin and Berlin with an LLM-based User Participation Simulator. Against 584 persona- and event-matched human role-play judgments, the LLM-based User Participation Simulator preserves method ordering with a 5.3-point mean absolute acceptance error. Across conventional controllers and agent baselines, EnergyBridge achieves the highest simulated authorization, lowest event-window energy, and the most reliable capacity commitment in both regions. We release human data and codes for reproducible human-centered grid-flexibility research: https://github.com/Agentic-Intelligence-Lab/EnergyBridge.

This paper presents a capacity-constrained incentive-based demand response approach for residential smart grids. It aims to maintain electricity grid capacity limits and prevent congestion by financially incentivising end users to reduce or shift their energy consumption. The proposed framework adopts a hierarchical architecture in which a service provider adjusts hourly incentive rates based on wholesale electricity prices and aggregated residential load. The financial interests of both the service provider and end users are explicitly considered. A deep reinforcement learning approach is employed to learn optimal real-time incentive rates under explicit capacity constraints. Heterogeneous user preferences are modelled through appliance-level home energy management systems and dissatisfaction costs. Using real-world residential electricity consumption and price data from three households, simulation results show that the proposed approach effectively reduces peak demand and smooths the aggregated load profile. This leads to an approximately 22.82% reduction in the peak-to-average ratio compared to the no-demand-response case.