Smart AMI based demand-response management in a micro-grid environment

Reliable operation of the electrical grid requires balancing between generation and energy demand at any time instant. Increasing penetration of intermittent sources of alternative generation compromises reliability and introduces significant price volatility. As a solution, demand response strategies have been studied to provide the necessary demand-side flexibility for utility to absorb some volatility. In this paper, a demand-response management (DRM) system is proposed, where a service provider finds a mutual optimal solution for the utility and the customers in a microgrid setting. This could be used by a service provider interacting with the respective customers and utility under the existence of some DRM agreements. In this study, a micro-grid consisting of a smart neighbourhood of twelve customers is taken as experimental case study and an advanced metering infrastructure (AMI) is implemented. Based on the formulation of an optimization problem which exploits price-responsive demand flexibility and the AMI infrastructure, a win-win-win strategy is presented. By shaping load patterns according to market pricing, the proposed method led to higher cost savings for the flexible customers and the utility, with consistent profit margins achieved by the service provider. Results for a range of typical scenarios are presented to demonstrate the effectiveness of the proposed demand-response management framework.