Strategies for demand load control to reduce balancing costs

This paper addresses the problem of using demand load control to minimize balancing costs when extra generation is needed. The problem is formalized as an optimal control problem where the amount of load to be postponed at successive time instants is set with respect to constraints representing the balance between generation and demand at successive time instants. The paper presents three market designs, namely minimization of the system operators' cost over the peak period, successive independent merit orders, and successive predictive merit orders considering payback effect. It shows that actual practices such as successive independent merit orders may lead to significant extra costs, which can be strongly reduced by including mid-term implications in the decision-making.