Summary
In future power system operation, wide area monitoring applications will rely heavily on demand response (DR) because of its inherent characteristics mainly in ancillary services (AS). The DR is widely applied in power system; however, impact of DR loop with communication delay on dynamic performance of two‐area power system, mainly load frequency control (LFC), have not been reported by researchers. This paper presents the impact of DR control loop with communication delay in two‐area thermal power systems for improvement in frequency deviation profile. The optimal power sharing between supplementary and DR loop control is presented for different load variations. Further, efficacy of controller performance is also validated by introducing non‐linearities in generation in terms of generation rate constraint (GRC) and governor dead band (GDB). The simulations are performed with inclusion of DR for LFC control problem in (i) single‐area, (ii) two‐area thermal and (iii) thermal power system integrated with pumped hydropower system to improve the dynamic performance of system and hence minimize the frequency deviation. The controller in supplementary loop and DR loop is optimized using particle swarm optimization (PSO) technique. Copyright © 2016 John Wiley & Sons, Ltd.