Economic demand response model in liberalised electricity markets with respect to flexibility of consumers. Issue 17 (13th October 2017)

• Record Type: Journal Article
• Authors: Sharifi, Reza; Anvari‐Moghaddam, Amjad; Fathi, Seyed Hamid; Guerrero, Josep M.; Vahidinasab, Vahid
• Is Part Of: IET generation, transmission & distribution. Volume 11:Issue 17(2017)
• Page Start: 4291
• Page End: 4298
• Publication Date: 2017-10-13
• Subjects: demand side management -- power system economics -- power markets -- pricing -- microeconomics; economic demand response model -- consumers flexibility -- power generation companies -- power transmission companies -- market regulation boards -- power industry regulator -- power systems collapse -- electricity industry restructuring -- economic DR model -- electricity market liberalisation -- consumption pattern -- high‐energy price -- utility function maximisation -- substitution utility function elasticity -- microeconomics; Electric power production -- Periodicals; Electric power transmission -- Periodicals; Electric power distribution -- Periodicals; 621.3105
• DOI: 10.1049/iet-gtd.2017.0412
• Languages: English
• ISSNs: 1751-8687

Abstract

Abstract : Before restructuring in the electricity industry, the primary decision‐makers of the electricity market were deemed to be power generation and transmission companies, market regulation boards, and power industry regulators. In this traditional structure, consumers were interested in receiving electricity at flat rates while paying no attention to the problems of this industry. This attitude was the source of many problems, sometimes leading to collapse of power systems and widespread blackouts. Restructuring of the electricity industry however provided a multitude of solutions to these problems. The most important solution can be demand response (DR) programs. This study proposes an economic DR model for residential consumers in liberalised electricity markets to change their consumption pattern from times of high‐energy prices to other times to maximise their utility functions. This economic model is developed based on constant elasticity of substitution utility function known as one of the most popular utility functions in microeconomics. Simulation results indicate that the proposed model is adaptable to any group of residential consumers with any disposition towards participation in DR programs and can be adjusted for any time period according to the preference given by the residential consumer.