A Bi-Level Optimization Model for Independent System Operator Considering Price-Based Demand Response

The participation of demand response in the regulation of the power system is an effective supplement to the regulation on the generation side. In order to fully tap the load-side demand response potential and maximize the benefits of the power system and the load, this paper designs a bi-level optimization model that considers the interaction between the independent system operator and the price-based demand response load. Taking the minimum operator's comprehensive cost and the maximum load response benefit as the objectives of the upper and lower levels of the model respectively, the constructed bi-level optimization problem is transformed into an easy-to-solve linear programming problem through the KKT condition and the big M method. The results of the calculation example show that the price-based demand response load can adjust its own electricity consumption according to the change of the real-time electricity price. After the system operator adjusts the electricity price for optimal scheduling, both the operator and the response load can realize cost savings.