The integration of renewable energy resources (RES) (such as wind and photovoltaic (PV)) on large or small scales, in addition to small generation units, and individual producers, has led to a large variation in energy production, adding uncertainty to power systems (PS) due to the inherent stochasticity of natural resources. The implementation of demand-side management (DSM) in distribution grids (DGs), enabled by intelligent electrical devices and advanced communication infrastructures, ensures safer and more economical operation, giving more flexibility to the intelligent smart grid (SG), and consequently reducing pollutant emissions. Consumers play an active and key role in modern SG as small producers, using RES or through participation in demand response (DR) programs. In this work, the proposed DSM model follows a two-stage stochastic approach to deal with uncertainties associated with RES (wind and PV) together with demand response aggregators (DRA). Three types of DR strategies offered to consumers are compared. Nine test cases are modeled, simulated, and compared in order to analyze the effects of the different DR strategies. The purpose of this work is to minimize DG operating costs from the Distribution System Operator (DSO) point-of-view, through the analysis of different levels of DRA presence, DR strategies, and price variations.
The Economics of Explicit Demand-side Flexibility in Distribution Grids: The Case of Mandatory Curtailment for a Fixed Level of Compensation