Demand-side management-based dynamic pricing within smart grid environment

In future smart grids, two-way communications will enable consumers to make informed decision about their energy consumption. Dynamic pricing can inspire customers to reshape their consumption, such that they consume energy efficiently and wisely. This paper introduces an advanced and simple method to achieve demand side management (DSM)-based dynamic pricing (DP) technique. The proposed technique is executed through two phases. Firstly, demand sensitivity analysis is executed to define the sensitive/insensitive load centre at any load pattern of the system. Secondly, a set of equations is developed to determine the best required demand reduction at each load centre using particle swarm and heuristic optimization techniques. The proposed method is applied to the IEEE-30 bus system, where the extracted results are used to construct a decision making table representing the best demand reduction required at any load pattern. Thus, the best customers' responses are defined realizing maximum plant utilisation and customer comfort. The results ensure the possibility of achieving technical and economical benefits to consumer and network. In addition, a great improvement in the network performance is attained and hence, the upgrading of the network can be postponed.