Dissatisfaction Cost Minimization-Based Decentralized Demand Response Approach Considering ISO’s Operation Requirements

Power system may suffer from the issues of power imbalance and network congestion when the peak load occurs. Investments on expansion of the power plant and upgrading the construction of the power system to satisfy the peak load demand are time costly and uneconomical for the independent system operator (ISO). As an alternative solution, demand response (DR) is able to mitigate the above issues. Heretofore, many existing studies have investigated the implementation of the DR programs in the smart grid paradigm. However, most of them neglect the congestion issues and implement DR programs in centralized manners which may disclose DR participants’ private information. To this end, this paper proposes a decentralized approach to tackle the privacy issue and minimize DR participants’ dissatisfaction cost individually. Moreover, ISO’s operation requirements are considered in the DR model formulation based on the direct current (DC) power flow model, which can alleviate network congestion issues caused by the peak load. Contrast results among different scenarios (i.e., no DR, centralized DR and decentralized DR) are carried out based on the IEEE 6-bus transmission network. The simulation results confirm the effectiveness of the proposed decentralized DR approach.