Demand response procurement framework: a new four‐step probabilistic method

Ma, Jessie; Venkatesh, Bala

doi:10.1049/iet-gtd.2019.0628

Cited by 5 publications

(8 citation statements)

References 22 publications

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“…To capture the economic effect of NBT on customers, Actual Prices were computed at bus 3. Actual Prices reflect total payments which equals sum of: (a) payments based upon LMPs to generators for energy; and (b) payments based upon LMPs to DR units for service [44], [45]. This concept has been used in industry as well.…”

Section: Fig 3-2 4-bus Test Systemmentioning

confidence: 99%

Beyond the Net Benefits Test: Optimizing Economic Demand Response

2023

Preprint

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Presently, economic Demand Response (DR) is procured based solely on energy market characteristics. There is no recognition of DR’s full and unusual impacts on energy markets, and lack of recognition of DR suppliers’ surplus. This incomplete understanding results in inefficient market outcomes and waste. In 2011 through Order 745, the Federal Energy Regulatory Commission (FERC) in the United States partially addressed some of these issues by mandating the Net Benefits Test (NBT), wherein DR can be purchased only when the benefits exceed the costs for consumers. While this shields consumers from harm, this does not yield the most efficient economic results. The ideas in this thesis completes the picture for economic DR. First, a new metric, Actual Price, is defined and used for a system-wide scheduling implementation with DR. Second, a new method to integrate NBT into a real-time optimal power flow (OPF) formulation that accounts for locational pricing is presented. Third, a new zonal planning method for DR procurement is offered, including the introduction of the DR market, which operates alongside the energy market. Lastly, the energy and DR markets are co-optimized in a real-time OPF formulation. The most significant contribution is the creation of a new concept: the DR market. While the DR market has always existed, the lack of recognition of its existence and absence of its model alongside the traditional energy market leads to the optimization of the energy market’s social welfare while ignoring the DR market’s social welfare. The omission of the DR market until now meant that the full economic picture of DR was not seen. This led to sub-optimal outcomes and reduced total social welfare. These new methods were tested on modified IEEE test systems and on real-world systems, such as PJM and Ontario. Results were compared with existing methods in both literature and practice, demonstrating the superior performance of the methods introduced in this thesis. Through implementation of the DR market concept, the thesis reports maximization of total social welfare considering both energy and DR markets for the first time.

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Section: Fig 3-2 4-bus Test Systemmentioning

confidence: 99%

Beyond the Net Benefits Test: Optimizing Economic Demand Response

2023

Preprint

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“…Pool-based DRX typically solicit bids from buyers, which can be transmission system operators, retailers, or distributors. With the exception of [32], past papers do not say how these bid offers are determined on behalf of buyers, a shortcoming they acknowledge. In this article, we will determine the demand curve for DR based on energy market characteristics, thereby articulating and respecting the link between the energy and DR markets.…”

Section: A Literature Reviewmentioning

confidence: 99%

“…The DR market comprises supply from DR service providers and demand from remaining electricity consumers, as shown in Fig. 6 [32]. While [32] provided the necessary background, a new, real-time DR service market is proposed in this article.…”

Section: Creation Of Real-time Dr Marketmentioning

confidence: 99%

“…6 [32]. While [32] provided the necessary background, a new, real-time DR service market is proposed in this article. A DR market settlement graph is shown in Fig.…”

Section: Creation Of Real-time Dr Marketmentioning

confidence: 99%

“…S2. Sequential Settlement of Markets: This method settles the DR market first, then it uses the optimum from the DR market to settle the energy market [16], [32]. The first step settles the DR market by finding its Nash equilibrium, where DR social welfare is maximized Maximize DRCS + DRSS.…”

Section: A Simple Test Casementioning

confidence: 99%

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New Real-Time Demand Response Market Co-Optimized With Conventional Energy Market

Venkatesh

2022

IEEE Systems Journal

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In addition to procuring energy, consumers in electricity markets procure demand response (DR) services. Demand and supply of energy in the electricity market drives the demand for DR services. Through the net benefits test (NBT), economic procurement of DR is limited to an amount that ensures that consumers benefit with the procurement of DR services. However, the NBT neither a) recognizes the coexistence of the DR market with the energy market; nor b) optimizes social welfare in the DR market in concert with that of the energy market. This lack of accounting for DR market surplus results in economic inefficiency. To address this shortcoming, we advance past works by: a) proposing a real-time DR market where the DR demand curve is a function of opportunity in the energy market; and b) co-optimizing energy and DR markets such that the total social welfare derived from both markets is maximized simultaneously. We also present an optimal power flow formulation and process to implement our ideas in real-time electricity markets. The formulation is tested on a simple test case and a system based on actual Pennsylvania-New Jersey-Maryland (PJM) data. For the PJM case, total social welfare is increased by 1.41% to 3.05% over existing DR procurement strategies, resulting in $14.5M to $30.9M additional benefits per hour.Index Terms-Demand response, optimal power flow, power system economics.

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Influence of Demand Response Suppliers’ Interests on Economic Demand Response

2024

2024 IEEE Canadian Conference on Electrical and Computer Engineering (CCECE)

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Demand response procurement framework: a new four‐step probabilistic method

Cited by 5 publications

References 22 publications

Beyond the Net Benefits Test: Optimizing Economic Demand Response

Beyond the Net Benefits Test: Optimizing Economic Demand Response

New Real-Time Demand Response Market Co-Optimized With Conventional Energy Market

Influence of Demand Response Suppliers’ Interests on Economic Demand Response

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