Reliability enhancement of a deregulated power system considering demand response

With the development of deregulated power systems, the conventional "same for all customers" electricity prices are getting replaced by spot prices. Under this pricing system, electricity prices will interact mutually with demands. This interaction can be described as demand response. In this paper, demand responses and their correlation are represented using the matrix of demand-price elasticity which includes self- and cross-elasticities. Moreover, effects of demand responses on system and nodal reliability of a deregulated power system are investigated using optimal power flow (OPF) and reliability evaluation techniques. A small but comprehensive reliability test system, RBTS, is studied, and simulation results show that demand response can improve the system and nodal reliability.