Demand Response Market

The Challenge

The increased presence of variable renewable generation drives a greater need for authorities to procure more ancillary services for grid balance. Traditionally, in the power grids, ancillary services (such as reserves) came from conventional power plants provide the majority of additional required flexibility leading to higher efficiency losses due to technical restrictions of such units. Recently, Demand Response (DR) programs gained much attention as other flexible options. One of the services is Contingency Reserve (CR), which is used to regulate the grid frequency in contingencies. Using DR resource for providing secure and reliable services necessitates a comprehensive market model, secure communication infrastructures, and technical and economical studies.  

The Solution

For the goal of contingency management, the optimal location(s) and capacity of battery energy storage system have been obtained with two objectives: frequency regulation caused by contingencies in transmission network and peak load shaving and load smoothing in distribution network. For providing CR services through DR resources, we propose a nascent market framework to regulate the frequency during contingencies considering the frequency transient constraints. For increasing the market efficiency, scheduling of some DR resources (such as water heater and batteries) has been performed. In addition, a game-theoretic market framework has been proposed to find the optimal bidding strategy by each DR aggregator through an incomplete-information game for selling the aggregated energy of the residential storage devices. Dynamic pricing has been considered in this model.

Featured Photos

Demand Response market

General structure of a power market including buyer DRAs, seller DRAs, and ISO

Stackelberg networked competition model for demand response market

considering dynamic pricing (real time pricing and time of use) in game-theoretic market model

Maui Island case study in Hawaii (with 3 demand response aggregators)

Demand response market implementation for open trading of ancillary services

General schematic of the proposed market framework in two types of games

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