Abstract
As a means for the power grid company to guide industrial users to reduce power consumption through economic compensation, incentive-based demand response management (IBDRM) plays an important role in the process that industrial users purchase power directly from power plants (direct power-purchase for short). Therefore, this paper studies the impacts of IBDRM on the power grid company, power plants, and industrial users from the perspective of industrial users’ direct power-purchase, so as to analyze whether the power grid company should implement IBDRM in direct power-purchase. First, we model the interactions of the power grid company, the power plant, and the industrial user under different scenarios, including Case N (the power grid company does not implement IBDRM) and Case R (the power grid company implements IBDRM) by using Stackelberg game. Then, we solve the models to get equilibrium results. The primary contributions of this article include following parts: 1) Compared with Case N, the power plant’s power selling price and the industrial user’s power-purchase quantity are higher under Case R, and both are negatively correlated with the compensation for the power plant. 2) The power grid company should implement IBDRM in direct power-purchase. Because under Case R, the industrial user reduces the power consumption, the profits of the power grid company and the power plant are higher, and the social welfare is also greater. 3) Under Case R, we also find that the social welfare is positively correlated with the compensation for the industrial user.
Highlights
With the rapid development of the global economy, the power demand is gradually increasing
For the demand response compensation mechanisms of the power grid company, the existing literature only considers that the power grid company provides the compensation for industrial users, whereas we study that the power grid company provides the compensation for power plants and industrial users at the same time
EQUILIBRIUM RESULTS UNDER CASES N AND R we calculate the equilibrium results of each direct power-purchase transaction entity under Cases N and R, respectively
Summary
With the rapid development of the global economy, the power demand is gradually increasing. 3) What are the impacts of IBDRM implemented by the power grid company on the actual power consumption of the industrial user, the profit of each direct power-purchase transaction entity (i.e., the power grid company, the power plant, and the industrial user), the consumer surplus, and the social welfare?. We consider a direct power-purchase transaction system consisting of a power grid company, a power plant, and an industrial user with high power consumption. We can obtain the equilibrium compensation of the power grid company, the equilibrium power selling price of the power plant, and the equilibrium power-purchase quantity of the industrial user On this basis, under Cases N and R, this paper compares the equilibrium power selling prices, the equilibrium powerpurchase quantities, the equilibrium actual power consumptions, the equilibrium profits of each direct power-purchase transaction entity, and the equilibrium consumer surplus.
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