A Review of Demand Side Management Strategies and Electricity Tariffs in Distributed Grids

Abstract

A major challenge in renewable energy planning and integration with existing systems is the management of intermittence of the renewable resources and customer demand uncertainties. In emerging distributed grids, state-of-the-art optimization techniques were used for cost and reliability objectives. In the existing literature, power dispatch and demand side management schemes were implemented for various techno-economic objectives. In renewable energy-based distributed grids, power dispatch is strategic to distributed grid operations. However, demand side management is preferred, as it allows more options for customer participation. Moreover, the demand side management can simply follow supplies. This paper investigates the functions of demand side management as it affects the planning and operations of renewable energy-based distributed grids. The traditional demand side management strategies were inflexible and affect customer comforts. The time-of-use methods on the other hand are utility-centered and do not allow customer participation. Hence, integration of demand side management with tariff regimes through hybridizations such as time-of-use based real-time pricing were conceptualized for improved economic performance, reliability enhancement, and mitigation of environmental implications.