Demand response program using incentive and dis-incentive based scheme

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Demand Response (DR) is becoming an effective tool to change consumption in order to maintain the balance between generation and consumption in real time. Demand Response Programs (DRPs) are employed for assisting the DR activities to encourage consumers to change their own load responding incentive/price based signal sent by the aggregator. Motivating the customers to change their consumption pattern poses a great challenge for the aggregator. In this paper, an incentive and dis-incentive based scheme has been designed for effective implementation of mandatory participation based incentive DR Program. This scheme is designed on the basis of social welfare concept calculating the expected gain of the generating utility and customers. While determining the benefit of generating utilities, this is observed that DR causes a loss for some costly units due to the reduction of the demand. The proposed scheme provides an incentive to such loss making generating utilities and responsive customers for playing their role in implementing the proposed DR program. Dis-incentive charge will then be imposed upon the non-responsive customers who are under the mandatory program but violate the agreement and still enjoy the monetary benefit in their energy bills due to price reduction. The effects on social welfare function due to different DR values show the importance of framing incentive prices for the participating utilities in DRP. Generation scheduling of 10 units is considered here to create different DR conditions and illustrate the effectiveness of the proposed scheme.