Evaluating short term benefits of demand response

Worldwide wave of research and construction on smart grid is rising. Although the concept and framework of smart grid is various in different countries, a consensus has been reached that the demand should play a more crucial role in the smart grid. To accurately evaluate the effects of demand response on market participants, quantitative analysis must be done. In this paper, short term benefit of demand response is evaluated based on day-ahead electricity market auction. Because of the non-convexity of the unit commitment problem, sharp and unexpected price spikes really appear when demand response is in action and its influence on demand response benefit can't be ignored. So, emphasis of the analysis is put on how changes in unit status due to demand response affect the benefits. Numerical simulation is carried out, and valuable conclusions are deduced.