Abstract
Demand response programs (DRs) can be implemented with less investment costs than those in power plants or facilities and enable us to control power demand. Therefore, they are highly expected as an efficient option for power supply–demand-balancing operations. On the other hand, DRs bring new difficulties on how to evaluate the cooperation of consumers and to decide electricity prices or rebate levels with reflecting its results. This paper presents a theoretical approach that calculates electricity prices and rebate levels in DRs based on the framework of social welfare maximization. In the authors’ proposal, the DR-originated changes in the utility functions of power suppliers and consumers are used to set a guide for DR requests. Moreover, optimal electricity prices and rebate levels are defined from the standpoint of minimal burden in DRs. Through numerical simulations and discussion on their results, the validity of the authors’ proposal is verified.
Highlights
The power suppliers bring the electricity consumption closer to the target value, which is preferable in the power supply–demand management by changing the electricity price or rewarding the money rebate to the consumers
The authors calculated the sets of the optimal electricity price or rebate level and the acceptable condition on each time slot
In the authors’ proposal, first, the utility functions of the power suppliers and the consumers were set, and the power supply–demand-balancing operation was represented under the social welfare maximization (SWM) framework
Summary
Academic Editor: Chun Sing Lai. Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Demand response programs (DRs) are defined as changes in electricity-consuming patterns in response to changes in electricity price or to incentive payment [1]. There are two major categories in DRs: one is the price-based DR, and the other is the incentivebased one. Time of use (TOU), real-time pricing (RTP), and critical-peak pricing (CPP) are well-known as the former. Unit prices of the electric power in these DRs become expensive during the periods of high electricity costs or critical power grid’s conditions (peak periods) in comparison with those in off-peak periods.
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