A distributive energy price-based hybrid demand response mechanism facilitating energy saving

Abstract

Against the backdrop of deep concern over the negative externalities of fossil fuel energy use and the continued growth of distributed renewable energy, traditional demand response (DR) mechanisms need to be transformed and to include energy-saving objectives. This study proposes a distributed energy price-based hybrid DR (DEPB-HDR) mechanism that combines real-time incentives, tariffs, and distributive energy procurement prices. Under DEPB-HDR, the grid administrator provides optimal real-time incentives for power distributors (PDs) and sets the optimal real-time procurement prices for power prosumers (PPs) to satisfy the objectives of minimum total cost and thermal power generation. PDs determine their optimal real-time tariffs based on their incentives. PPs play a dual role: the demand side adjusts their electricity purchases according to real-time tariffs, and the supply side changes their power sales according to real-time procurement prices. The proposed mechanism is analysed using a three-layer Stackelberg game, and a distributed algorithm is designed to account for privacy and information incompleteness. Finally, numerical simulations were conducted, and the results showed that DEPB-HDR could increase energy savings while ensuring participants’ interests.