Economical and technical evaluation of implementation mandatory demand response programs on Iranian power system

There is widespread recognition of the need to institute demand response (DR) in today's electricity markets. During critical peaks in the demand for electricity, such as during summer heat waves, wholesale electricity prices can rise to their highest levels. Basically, demand response programs are divided into two main categories namely, incentive-based programs and time-based programs. The focus of this paper is on two mandatory programs namely Interruptible/ Curtailable service (I/C) and Capacity market programs (CAP), which are incentive-based demand response programs including penalties for customers in case of no responding to load reduction. First, by using the concept of Price Elasticity of Demand and Customer Benefit Function, economic model of above mentioned programs is developed. To evaluate the performance of the model, simulation study has been conducted using the load curve of the peak day of the Iranian power system grid in 2007. In the numerical study section, the impact of these programs on load shape and load level, and benefit of customers as well as reduction of energy consumption are shown.