A demand-side pricing strategy considering thermal comfort

This paper proposes a demand-side pricing strategy to purchase regulation service. The demand-side regulation service has the advantage of lower cost and faster response to reduce the utility company's cost comparing with the traditional automatic generation control (AGC). Thus, it is necessary for the utility company to make a tradeoff between the demand-side regulation and the AGC to minimize the regulation cost. In this study, we establish a cost model based on the thermal comfort and formulate a cost minimization problem. Specifically, we determine the purchase of the regulation service within regulating range provided by the consumers. In general, the cost minimization problem is nonconvex, and we use the particle swarm optimization (PSO) algorithm to obtain the globally optimal price for the demand-side regulation service. Numerical results demonstrate the effectiveness of the proposed pricing strategy, and the demand-side regulation service can reduce the cost of the utility company significantly.