Title: A pricing strategy for demand-side regulation with direct load control: a nonconvex optimisation approach

Authors: Kai Ma; Congshan Wang; Jie Yang; Chenliang Yuan; Xinping Guan

Addresses: School of Electrical Engineering, Yanshan University, Qinghuangdao 066004, China ' School of Electrical Engineering, Yanshan University, Qinghuangdao 066004, China ' School of Electrical Engineering, Yanshan University, Qinghuangdao 066004, China ' School of Electrical Engineering, Yanshan University, Qinghuangdao 066004, China ' Key Laboratory of System Control and Information Processing, Ministry of Education, Department of Automation, Shanghai Jiao Tong University, Shanghai 200240, China

Abstract: This paper presents a pricing strategy to purchase the demand-side regulation service. Comparing with the traditional automatic generation control (AGC), the demand-side regulation service has lower cost and faster ramp rate, and thus can reduce the cost of the utility company. However, the payments for the demand-side regulation can also increase the cost. Thus, the cost of the utility company should be minimised by making a tradeoff between the demand-side regulation and the AGC. In this study, we formulate a cost minimisation problem considering the two-side regulation services. In general, the cost minimisation problem is nonconvex, and we use the forward method and golden section algorithm to obtain the globally optimal price for the demand-side regulation service. Numerical results demonstrate that the efficiency of the proposed model and the demand-side regulation can reduce the cost to the utility company significantly.

Keywords: AGC; automatic generation control; cost; demand response; load control; pricing; regulation service; nonconvex; optimisation; forward method; golden section algorithm.

DOI: 10.1504/IJSCIP.2017.084264

International Journal of System Control and Information Processing, 2017 Vol.2 No.1, pp.74 - 89

Received: 02 Jul 2016
Accepted: 06 Mar 2017
Published online: 22 May 2017 *

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