Implementing Demand Response to reduce spinning Reserve Costs in the Electricity Market

recently, significant emphasis has been placed on the implementation of demand response (DR) initiatives, which are primarily designed to reduce electricity costs, alleviate congestion in transmission lines, enhance security, and increase market fluidity. Essentially, these demand response initiatives can be classified into two broad groups: incentive-based schemes and time-based strategies. This paper focuses on reducing the market cost of ancillary services (specifically, the reduction of reserve services) through the implementation of a demand response (DR) program. The consumption management and demand response program are among the most critical methods for reducing electricity consumption during peak demand hours. This program significantly contributes to lowering power generation and reserve costs. Consumption management involves reducing the energy and power acquired from power plant companies during specific periods. By freeing up existing production capacity, this process significantly reduces production costs and reserve services in a competitive electricity market. Moreover, in many countries, consumers’ electricity prices and expenses for large-scale reserve services are linked to the highest energy consumption during peak periods. Using demand response programs and managing electricity consumption during these peak hours can effectively lower costs. This article proposes a solution focused on substantially reducing reserve service costs within the restructured electricity market through the implementation of an effective consumption management program.