Demand Response Management for Smart Grids With Wind Power

In this paper, we study demand response (DR) management when a wind farm is connected to a smart grid. Total social welfare, defined in terms of consumer utility and cost of power production, is maximized while the probability of power deficit due to the uncertainty in renewable production is limited by an upper bound. We find the optimal deficit-limiting conventional power production and consumption schedules, and demonstrate their superiority over competing policies, particularly when the renewable share is high. It is also noted that geographically diverse turbines (or wind farms) should be connected to the grid to ensure less variable power output and low enough probability of deficit.