Employing demand response in energy procurement plans of electricity retailers

This paper proposes a new framework in which demand response (DR) is incorporated as an energy resource of electricity retailers in addition to the commonly used forward contracts and pool markets. In this way, a stepwise reward-based DR is proposed as a real-time resource of the retailer. In addition, the unpredictable behavior of customers participating in the proposed reward-based DR is modeled through a scenario-based participation factor. The overall problem is formulated as a stochastic optimization approach in which pool prices and customers' participation in DR are uncertain variables. The feasibility of the problem is evaluated on a realistic case of the Australian National Electricity Market (NEM) and solved using General Algebraic Modeling System (GAMS) software. (C) 2014 Elsevier Ltd. All rights reserved.