Load scheduling with maximum demand and time of use pricing for microgrids

Abstract

The power system is being decentralized as it moves towards becoming a smart grid. Loads, distributed generation and storage will be managed as microgrids. To ensure system reliability the total installed capacity of the grid should be more than the expected Maximum Demand (MD) on it. It is much more economical to schedule the MD instead of adding more capacity to deal with capacity balance issue. Demand Response (DR) within a microgrid provides various ways of reducing the MD. This paper focuses on the price based demand response (PBDR) schemes with a two part tariff based on Time of Use Pricing (ToUP). Such tariffs can be used as a tool by the utilities to motivate the consumers to shift their loads to low price periods in a day. The motivation for the consumer is the potential savings he can achieve. This paper formulates the load scheduling problem as a combinatorial optimization problem constrained by the MD limit on a microgrid. The performance of this constrained optimization algorithm is also analyzed.