A pricing strategy for demand-side regulation with direct load control: a nonconvex optimisation approach. (2017)

• Record Type: Journal Article
• Authors: Ma, Kai; Wang, Congshan; Yang, Jie; Yuan, Chenliang; Guan, Xinping
• Is Part Of: International journal of system control and information processing. Volume 2:Number 1(2017)
• Page Start: 74
• Page End: 89
• Publication Date: 2017
• Subjects: AGC -- automatic generation control -- cost -- demand response -- load control -- pricing -- regulation service -- nonconvex -- optimisation -- forward method -- golden section algorithm; System design -- Data processing -- Periodicals; Information technology -- Periodicals; 003.5
• Languages: English
• ISSNs: 1759-9334

Abstract

This paper presents a pricing strategy to purchase the demand-side regulation service. Comparing with the traditional automatic generation control (AGC), the demand-side regulation service has lower cost and faster ramp rate, and thus can reduce the cost of the utility company. However, the payments for the demand-side regulation can also increase the cost. Thus, the cost of the utility company should be minimised by making a tradeoff between the demand-side regulation and the AGC. In this study, we formulate a cost minimisation problem considering the two-side regulation services. In general, the cost minimisation problem is nonconvex, and we use the forward method and golden section algorithm to obtain the globally optimal price for the demand-side regulation service. Numerical results demonstrate that the efficiency of the proposed model and the demand-side regulation can reduce the cost to the utility company significantly.