Nodal user's demand response based on incentive based programs

This paper describes a practical approach to identify nodal price compensation payment for nodal consumers willing to reduce their energy consumption (consumers‘ demand response). The implementation of a nodal reliability service pricing is based on contingency assessment of N - 2 order for transmission lines. A representative annualized demand curve is used to reflect the system's operation condition by seasons. Such curve is used to access the nodal reliability impact trough a whole year in order to determine back-payments (incentive payment) to users for service interruption. The IEEE_RTS 24 nodes system is used to implement the proposed approach.