A comprehensive approach to Demand Response in restructured power systems

In restructured power systems there are many independent players who benefit from Demand Response (DR). These include the Independent System Operator (ISO), distributors, retailers, and aggregators. This paper proposes a new concept- Demand Response eXchange (DRX)-in which DR is treated as a public good to be exchanged between DR buyers and sellers. Buyers need DR to improve the reliability of their electricity dependent businesses and systems. Sellers have the capacity to significantly modify electricity demand on request. Microeco-nomic theory is used to model the DRX in the form of a pool-based market. In this market, a DRX Operator (DRXO) collects DR bids and offers from the buyers and sellers respectively. It then clears the market by maximizing the total market benefit subject to certain constraints including: demand-supply balance, transaction cost, and additional constraints related to individual player needs. The DRX model is also tested on a small power system, and its efficiency is reported.