A Price-Based Demand Response Scheduling Model in Day-Ahead Electricity Market

The variation of power consumption on the demand side is a challenging issue for the real time balancing of power systems. To tackle this problem, various demand response programs have been introduced to help the Independent System Operator (ISO) in mitigating the demand fluctuation. Typically, they include demand curtailment programs and price responsive demand programs. This paper presents a scheduling model at the day-ahead stage incorporating the price-based demand bidding that enables the price-elastic feature of demand. The bidding mechanism is visualized and the mathematical representation of the scheduling model are presented. By simulating the model on the IEEE 30-bus system, it is shown that integrating price-elastic demand bids into day-ahead scheduling can effectively reduce the demand to average demand ratio. In addition, the proposed model not only brings surplus to the participating load serving entities (LSEs), but also increase the social welfare of the power system.