Open AccessEconomic demand response model in liberalised electricity markets with respect to flexibility of consumers
Author(s) -
Sharifi Reza,
AnvariMoghaddam Amjad,
Fathi Seyed Hamid,
Guerrero Josep M.,
Vahidinasab Vahid
Publication year - 2017
Publication title -
iet generation, transmission and distribution
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.92
H-Index - 110
eISSN - 1751-8695
pISSN - 1751-8687
DOI - 10.1049/iet-gtd.2017.0412
Subject(s) - restructuring , electricity , electricity market , flexibility (engineering) , demand response , electric power industry , consumption (sociology) , electricity retailing , price elasticity of demand , economics , business , microeconomics , industrial organization , engineering , finance , sociology , social science , management , electrical engineering
Before restructuring in the electricity industry, the primary decision‐makers of the electricity market were deemed to be power generation and transmission companies, market regulation boards, and power industry regulators. In this traditional structure, consumers were interested in receiving electricity at flat rates while paying no attention to the problems of this industry. This attitude was the source of many problems, sometimes leading to collapse of power systems and widespread blackouts. Restructuring of the electricity industry however provided a multitude of solutions to these problems. The most important solution can be demand response (DR) programs. This study proposes an economic DR model for residential consumers in liberalised electricity markets to change their consumption pattern from times of high‐energy prices to other times to maximise their utility functions. This economic model is developed based on constant elasticity of substitution utility function known as one of the most popular utility functions in microeconomics. Simulation results indicate that the proposed model is adaptable to any group of residential consumers with any disposition towards participation in DR programs and can be adjusted for any time period according to the preference given by the residential consumer.