A review on price-driven energy management systems and demand response programs in smart grids

Price-driven energy management (EM) systems and demand response (DR) programs are reviewed in this paper, considering different types of electricity prices, such as real-time prices, day-ahead prices, and time-of-use tariffs. This paper clarifies objectives, constraints and optimization techniques of price-driven EM systems and DR programs, while showing their relevant qualitative and quantitative modeling approaches. Price-driven EM systems and DR programs have capability to improve technical and financial aspects of distribution networks, when more renewable energy sources are integrated into smart grids. Environmental constraints, financial benefits, and global policies represent main incentives of price-driven EM systems and DR programs, whereas their barriers include social concerns (i.e., end-user privacy), technical complications (e.g., requirements of information and communication technologies), and revenue uncertainties. Moreover, this paper assesses strengths, weaknesses, opportunities and threats (SWOT) of implementing such energy management strategies in smart grids.