Investigating Impacts of CVR and Demand Response Operations on a Bi-Level Market-Clearing With a Dynamic Nodal Pricing

This paper investigates the impacts of conservation voltage reduction (CVR) on electricity prices, the local market, and technical issues in distribution networks. An increase in electricity demand is one of the key challenges for developing sustainable societies. An increase in electric consumption puts immense pressure on electricity providers, which forces them to apply for load reduction programs during peak-demand time intervals. The CVR is one of the popular methods for load reduction, but how it would impact the pricing process and electricity market at the distribution level needs further investigation. The proposed methodology includes a power tracing and loss allocation-based pricing method. Since the distribution networks are going to be confronted by penetration of distributed energy resources (DER), prosumers, and microgrids, it is important to have a comprehensive methodology. This paper deploys a bi-level optimization algorithm to consider the financial benefits of all participating agents. In addition to CVR, the demand response (DR) programs are considered to shift and curtail flexible loads by the distribution system operator (DSO) and prosumers, respectively. The price sensitivity of prosumers toward change in the network’s voltage for better planning is calculated. The operation costs/profits of DSO/prosumers decrease/increase during CVR and DR programs by 4.63% / 3%, respectively.