During recent years, with the advent of restructuring in power systems as well as the increase of electricity demand and global fuel energy prices, challenges related to implementing demand response programs (DRPs) have gained remarkable attention of independent system operators (ISOs) and customers, aiming at the improvement of attributes of the load curve and reduction of energy consumption as well as benefiting customers. In this paper, different types of DRPs are modeled based on price elasticity of the demand and the concept of customer benefit. Besides, the impact of implementing DRPs on the operation of grid-connected microgrid (MG) is analyzed. Moreover, several scenarios are presented in order to model uncertainties interfering MG operations including failure of generation units and random outages of transmission lines and upstream line, error in load demand forecasting, uncertainty in production of renewable energies (wind and solar) based distributed generation units, and the possibility that customers do not respond to scheduled interruptions. Simulations are conducted for two principal categories of DRP including incentive-based programs and timebased programs on an 11-bus MG over a 24-hour period and also a 14-bus MG over a period of 336 hours (two weeks). Simulation results indicate the effects of DRPs on total operation costs, customer's benefit, and load curve as well as determining optimal use of energy resources in the MG operation. In this regard, prioritizing of DRPs on the MG operation is required.
Following restructuring of power industry, electricity supply to end-use customers has undergone fundamental changes. In the restructured power system, some of the responsibilities of the vertically integrated distribution companies have been assigned to network managers and retailers. Under the new situation, retailers are in charge of providing electrical energy to electricity consumers who have already signed contract with them. Retailers usually provide the required energy at a variable price, from wholesale electricity markets, forward contracts with energy producers, or distributed energy generators, and sell it at a fixed retail price to its clients. Different strategies are implemented by retailers to reduce the potential financial losses and risks associated with the uncertain nature of wholesale spot electricity market prices and electrical load of the consumers. In this paper, the strategic behavior of retailers in implementing forward contracts, distributed energy sources, and demand-response programs with the aim of increasing their profit and reducing their risk, while keeping their retail prices as low as possible, is investigated. For this purpose, risk management problem of the retailer companies collaborating with wholesale electricity markets, is modeled through bi-level programming approach and a comprehensive framework for retail electricity pricing, considering customers' constraints, is provided in this paper. In the first level of the proposed bi-level optimization problem, the retailer maximizes its expected profit for a given risk level of profit variability, while in the second level, the customers minimize their consumption costs. The proposed programming problem is modeled as Mixed Integer programming (MIP) problem and can be efficiently solved using available commercial solvers. The simulation results on a test case approve the effectiveness of the proposed demand-response program based on dynamic pricing approach on reducing the retailer's risk and increasing its profit.
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