Demand Side Management: Optimal Demand Response in Distribution Networks With Several Energy Retail Companies

Abstract

In this work, a social welfare maximization problem is solved to determine the optimal scheduling of end-user controllable loads, smart appliances, and energy storage. The framework considers multiple retail energy suppliers as well as the AC power flow constraints of the distribution system. The demand side management program is focus on residential and commercial end-users. We have formulated a day-ahead residential bidding/buyback scheme modeled as an optimal power flow problem. This demand side program schedules end-user’s controllable loads or smart appliances and takes advantage of the flexibility of an energy storage system. The demand side management scheme minimizes retail company’s operating costs in the wholesale market, and it also considers distribution network constraints, assuring the appropriate quality of service. We have used a dual decomposition method to decouple some constraints while maximizing social welfare. We have also introduced a demand response call event with the main objective to take into consideration the system operational constraints. Through the coordination via local marginal prices, we have obtained a decentralized and distributed bidding/buyback scheme proposing a demand side management program that preserves the integrity of the private information of the different participants.