Minimization of Network Losses With Financial Incentives in Voluntary Demand Response

This paper delivers a customer voluntary demand response (CVDR) program to help the load serving entity (LSE) curtail peak demand and cutoff carbon emission. LSE provides financial incentives to customers who are willing to curtail energy consumption during peak demand hours. A bilevel problem is proposed to determine the optimal power curtailment and financial incentives to achieve equivalent minimal cost for LSE and maximal utility function for customers simultaneously. The effects of the CVDR program are examined with two benchmark radial systems: 3-bus and the IEEE 8500-Node networks. All simulations are carried out with General Algebraic Modeling System and MATLAB. Numerical studies unveil that CVDR enhances customer’s willingness in demand response program and achieve economic savings and peak shaving for LSE.