Operating strategy for load service entities using flexible real-time pricing through stochastic dual dynamic...

Area of Science:

• Electrical Engineering
• Energy Systems
• Operations Research

Background:

• Renewable energy integration challenges grid stability.
• Traditional supply-side controls are insufficient.
• Demand-side management (DSM) and dynamic pricing (DP) are crucial for grid stability.

Purpose of the Study:

• To propose a flexible operating strategy for demand response (DR) using real-time pricing (RTP) and demand elasticity.
• To enhance DR accuracy by modeling inter-temporal demand effects.
• To optimize price adjustments and manage consumer response uncertainty.

Main Methods:

• Developed a demand model integrating self-time and cross-time elasticity.
• Formulated the optimal price-adjustment as a multi-stage optimization problem.
• Applied Stochastic Dual Dynamic Programming (SDDP) and a modified Markov Chain for uncertainty management.

Main Results:

• The proposed strategy effectively flattens the demand curve by minimizing hourly demand variance.
• Demonstrated successful demand balancing and stabilization of grid operations.
• Showcased stabilization of utility profits through optimized pricing strategies.

Conclusions:

• The novel RTP-based DR strategy enhances grid reliability with increasing renewables.
• Integrating advanced demand modeling and optimization techniques is key.
• The approach offers a robust solution for managing demand uncertainty and ensuring economic viability.