Examination of incentive based demand response in western connection reduced model

In this paper, an incentive base demand response (DR) program is proposed that has advantages for smaller residential consumers. In this model, a Load Serving Entity (LSE) needs to determine desired load reduction and an adequate incentive payment for their customers through the DR program. The program should be simple to implement for both the customer and LSE while achieving savings. Two different thresholds above market variable price aredered as the trigger for the proposed DR program: constant and a variable optimum threshold that is found by the optimization proposed in this paper. In this optimization framework, the savings for the LSE and customer is considered as well as the client convenience based on the number of requests for load change in each day and season under the DR program. Results show a constant threshold has more impact on locational marginal price (LMP) average and volatility in the high load season but a variable threshold can achieve benefits throughout the year.