Abstract
Electricity demand in a certain locality varies during the day, depending on weather conditions, daily life routines, or a social event in a town. During high/peak demands, expensive power plants are put into operation, which affects electricity prices. Moreover, power lines are overloaded. If generation capacity is insufficient, a blackout may result. Demand response (DR) programs are widely proposed in energy research to tackle these problems. Although the benefits of DR programs are well known, customer response levels to these programs is low. This is due to the small fraction of benefits they receive against the loss of comfort, lost leisure time, and other inconveniences. The objective of this work is to study DR costs from the customer perspective by considering these factors. A customer survey-based direct approach is used to evaluate the willingness of customers to accept (WTA) a certain compensation when shifting the load is adopted. Two different methods are used to calculate DR costs: percentage compensation, which customers are WTA, and one based on a macroeconomic model, which considers the dependency factor of customers on loads and hourly wage. A linear mathematical model is presented based on both these techniques. This study reveals that DR costs are much less than interruption costs paid by the utility company, and hence is in the best interests of all stakeholders, i.e., customers, utility company, and transmission company.
Highlights
In this era of fast lifestyle, electricity has become one of the most important human dependencies
Peak electricity demands result in increase in electricity prices, overloading of power lines, and sometimes interruption of electric supply to the customers
One of the widely accepted solutions is demand response (DR), in which customers are asked to shift some of their loads to off-peak hours
Summary
In this era of fast lifestyle, electricity has become one of the most important human dependencies. We are dependent on electricity at every step of our life. As a result of high dependency on electricity, the demand for electricity production is increasing day by day, which requires utility companies to increase their generation capacity to fulfill the desired demand [2]. Increasing demand causes peaks during certain hours of a day in electricity load curve [3], and this peak may have unbearable effects on power transmission lines, which are at a high risk of failure and losses due to overloading, which leads to power outages or blackouts [4]. The current solutions to the problem of irregular electricity demand is increasing generation capacities by adding new power plants, developing energy storage techniques and demand response (DR) [5]. The first two solutions are based on the idea of increasing supply to match the demand
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