Power system planning with high renewable energy penetration considering demand response

Electric system planning with high variable renewable energy (VRE) penetration levels has attracted great attention world-wide. Electricity production of VRE highly depends on the weather conditions and thus involves large variability, uncertainty, and low-capacity credit. This gives rise to significant challenges for power system planning. Currently, many solutions are proposed to address the issue of operational flexibility inadequacy, including flexibility retrofit of thermal units, inter-regional transmission, electricity energy storage, and demand response (DR). Evidently, the performance and the cost of various solutions are different. It is relevant to explore the optimal portfolio to satisfy the flexibility requirement for a renewable dominated system and the role of each flexibility source. In this study, the value of diverse DR flexibilities was examined and a stochastic investment planning model considering DR is proposed. Two types of DRs, namely interrupted DR and transferred DR, were modeled. Chronological load and renewable generation curves with 8760 hours within a whole year were reduced to 4 weekly scenarios to accelerate the optimization. Clustered unit commitment constraints for accommodating variability of renewables were incorporated. Case studies based on IEEE RTS-96 system are reported to demonstrate the effectiveness of the proposed method and the DR potential to avoid energy storage investment.