Reliability enhancement of deregulated power systems considering demand-price elasticity

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 loads. This interaction can be described as demand-price elasticity. In this paper, demand-price elasticity is studied using the matrix of self/cross-elasticities, and its effects on nodal spot price and reliability of deregulated power systems are investigated using optimal power flow (OPF) and reliability evaluation techniques. A small but comprehensive reliability test system, RBTS, is used to illustrate the concepts, and simulation results show that demand-price elasticity can reduce the volatility of nodal spot price while at the same time improving the system reliability.