Demand response allocation to hedge LMP variability through optimal basis invariancy set of linear economic dispatching

With more wind power permeating into the power grid, one of the issues caused by its random output is the fluctuation of locational marginal price (LMP) which is also affected by the fluctuation of system load. However, the fluctuation of electricity price will affect many aspects of the national economy. In order to cope with this issue, a demand response (DR) allocation mechanism is presented in this paper to hedge the LMP variability which is equal to keep the optimal basis invariant. Whether DR is available to keep the optimal basis optimal when wind power and load fluctuate within certain ranges is estimated from the perspective of sensitivity analysis of linear programming. Finally, the scheme is applied to test case IEEE 31 bus system and its feasibility is proved by the simulation results.