Due to load growth, aging infrastructure, and a competitive environment, innovative solutions are required by electrical utilities to enhance the utilization of transformers which are cost intensive. This paper proposes a demand response optimization model based on transformer hottest-spot temperature. The optimization model quantifies the improvement of transformer utilization through DR. The proposed model is applied to a typical Finnish residential primary and secondary distribution transformers for case studies of load with and without DR. The results show that the loading on the transformers can be significantly increased without sacrificing the life of transformers. The gain in utilization depends on the DR capability of the load. Significant monetary benefits can be achieved with the deployment of the proposed model in a real system.

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