A Flexible Responsive Load Economic Model for Industrial Demands

Reza Sharifi, Amjad Anvari-Moghaddam, S. Hamid Fathi , Vahid Vahidinasab

Research output: Contribution to journalJournal articleResearchpeer-review

9 Citations (Scopus)
71 Downloads (Pure)

Abstract

The best pricing method for any company in a perfectly competitive market is the pricing scheme with regards to the marginal cost. In contrast to this environment, there is a market with imperfect competition. In this market, the price can be affected by some players in the generation/demand side (i.e., suppliers and/or buyers). In the economic literature, “market power” refers to a company that has the power to affect prices. In fact, market power is often defined as the ability to divert prices from competitive levels. In the electricity market, especially because of the integration of intermittent renewable energy resources (RESs) along with the inflexibility of demand, there are levels of market power on the supply side. Hence, implementation of demand response (DR) programs is necessary to increase the flexibility of the demand side to deal with the intermittency of renewable generations and at the same time tackle the market power of the supply side. This paper uses economic theories and mathematical formulations to develop a flexible responsive load economic model (FRLEM) based on real-time pricing (RTP) to show modification of the load profile and mitigation of the energy costs for an industrial zone. This model was developed based on constant elasticity of the substitution utility function, known as one of the most popular utility functions in microeconomics.
Original languageEnglish
Article number147
JournalProcesses
Volume7
Issue number3
Pages (from-to)1-13
Number of pages13
ISSN2227-9717
DOIs
Publication statusPublished - Mar 2019

Keywords

  • Demand-side management
  • Economic demand response model
  • Consumer utility function
  • Electricity market restructuring

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