Modeling of demand response programs based on market elasticity concept

Demand response programs (DRPs) are appropriate tools to improve power system operation. Applying these programs results in a reduction in reliability cost and electricity price, transmission congestion and pollution relief, and also can determine postponements in network expansion. Therefore, developing a comprehensive model for DRPs is necessary for accurate planning and encouragement of consumers to increase their participation. In this paper, by using the market elasticity concept, a comprehensive model for DRPs is developed. Market elasticity is defined as sensitivity of electricity price on the network load. The proposed model is able to increase the consumers’ participation by providing a higher awareness about their participations’ effects on their electricity cost reduction. This additional awareness is provided by creating the information about the impact of consumers’ participation on the price of the electricity market in addition to the direct impact of their participations on their cost reduction. Information about the impact of consumers’ participation on the price of the electricity market is provided by the market elasticity concept. The effectiveness of the proposed ρ(i) model is demonstrated by simulation results.