An Incentive-Based Demand Response (DR) Model Considering Composited DR Resources

Abstract

Demand response (DR) has been recognized as a powerful tool to help mitigate power imbalances in a future smart energy system. This paper takes the point of view of a grid operator (GO) to establish an intraday resource trading framework, over which DR resources from different sectors (large industrial consumers and small- or middle-sized customers) are brought to the system level and are assessed by the GO along with the generators, with the aim of procuring the required system resources at minimal cost. Considering the distinct behaviors of the involved entities, Stackelberg game theory was adopted to analyze the coordination among the various decision makers. A unique Stackelberg equilibrium was identified that yields the optimal outcome for the resource trading game between the GO and demand-side participators. Simulation results demonstrated that the total procurement cost was minimized by applying the proposed approach.