The Impact of the Financial Incentive Levels of Demand Response Programs on the Generation Cost of Solar-Integrated Power Systems

The financial incentives provided to consumers are important components of demand response (DR) programs. However, determining the appropriate levels of incentives for consumers remains a challenge. This paper used the incentive level adopted by the peak-clipping DR program as a threshold to investigate how increasing the incentive levels for the load-shifting DR program impacts the generation cost of solar-integrated power systems. In this simulation study, distinct load profiles with high and low daytime loads were considered under prioritized solar system conditions. The cost of generation was modeled as a dynamic economic dispatch task using particle swarm optimization. The results revealed that there was a greater reduction of the generation cost for peak clipping than for all incentive levels of load shifting. However, the cost gap could be quite small under high solar penetration and low daytime load system conditions. Moreover, it was also observed that using the same incentives for load shifting and peak clipping had an adverse impact on the generation cost. The outcomes of this study suggested that peak-clipping DR programs exhibit a greater impact on generation cost reduction than do load-shifting DR programs.