Demand Response Exchange in the Stochastic Day-Ahead Scheduling With Variable Renewable Generation

Abstract

This paper proposes a pool-based demand response exchange (DRX) model in which economic demand response (DR) is traded among DR participants as an alternative for managing the variability of renewable energy sources (RES). Load curtailment bids are provided by individual DRX participants and the DRX is cleared by maximizing the total social welfare, which is subject to supply-demand balance and individual bidders’ inter-temporal operation constraints. The proposed DRX model is further integrated in the current context of the ISO’s day-ahead scheduling in electricity markets. A two-step sequential market clearing framework is presented in which the ISO’s stochastic day-ahead scheduling is simulated first for calculating the expected locational marginal prices (LMPs) and then, the proposed DRX is cleared successively using the expected LMPs. The simulation of the ISO’s stochastic day-ahead scheduling incorporates random outages of system components and forecast errors for hourly renewable generation and loads. The decomposition-based method is employed to solve the ISO’s day-ahead scheduling in the base case and scenarios. Numerical tests are performed for a 6-bus system and an IEEE 118-bus system. The results demonstrate the benefit of utilizing the DRX model for customer market participation in the ISO’s day-ahead market scheduling.