Abstract
Presently,
economic
Demand
Response
(DR)
is
procured
based
solely
on
energy
market
characteristics.
There
is
no
recognition
of
DR’s
full
and
unusual
impacts
on
energy
markets,
and
lack
of
recognition
of
DR
suppliers’
surplus.
This
incomplete
understanding
results
in
inefficient
market
outcomes
and
waste.
In
2011
through
Order
745,
the
Federal
Energy
Regulatory
Commission
(FERC)
in
the
United
States
partially
addressed
some
of
these
issues
by
mandating
the
Net
Benefits
Test
(NBT),
wherein
DR
can
be
purchased
only
when
the
benefits
exceed
the
costs
for
consumers.
While
this
shields
consumers
from
harm,
this
does
not
yield
the
most
efficient
economic
results.
The
ideas
in
this
presentation
complete
the
picture
for
economic
DR.
First,
a
new
metric,
Actual
Price,
is
defined
and
used
for
a
system-wide
scheduling
implementation
with
DR.
Second,
the
energy
and
DR
markets
are
co-optimized
in
a
real-time
OPF
formulation.
The
most
significant
contribution
is
the
creation
of
a
new
concept:
the
DR
market.
While
the
DR
market
has
always
existed,
the
lack
of
recognition
of
its
existence
and
absence
of
its
model
alongside
the
traditional
energy
market
leads
to
the
optimization
of
the
energy
market’s
social
welfare
while
ignoring
the
DR
market’s
social
welfare.
The
omission
of
the
DR
market
until
now
meant
that
the
full
economic
picture
of
DR
was
not
seen.
This
led
to
sub-optimal
outcomes
and
reduced
total
social
welfare.
These
new
methods
were
tested
on
modified
IEEE
test
systems
and
on
real-world
systems,
such
as
PJM
and
Ontario.
Results
were
compared
with
existing
methods
in
both
literature
and
practice,
demonstrating
the
superior
performance
of
the
methods
introduced.
Through
implementation
of
the
DR
market
concept,
this
presentation
reports
a
method
to
maximize
total
social
welfare
considering
both
energy
and
DR
markets.
Speaker
Jessie Ma