Assessing the benefits of residential demand response in a real time distribution energy market

In the field of electricity distribution networks and with the advent of smart grids and microgrids, the use of Distribution Locational Marginal Price (D-LMPs) in a Real Time (RT) distribution market managed by a Distribution System Operator (DSO) is discussed in presence of empowered residential end-users that are able to bid for energy by a demand aggregator while following Demand Response (DR) initiatives. Each customer is provided by a transactive controller, which reads the locational market signals and answers with a bid taking into account the user preferences about some appliances involved in DR activities and controlled by smart plugs-in. In particular, Heating Ventilation and Air Conditioning (HVAC) appliances and shiftable loads are controlled so that their consumption profile can be modified according to the price of energy. In order to assess the effectiveness of the proposed method in terms of energy and cost saving, an innovative probabilistic methodology for evaluating the impact of residential DR choices considering uncertainties related to load demand, user preferences, environmental conditions, house thermal behavior and wholesale market trends has been proposed. The uncertainties related to the stochastic variations of the variables involved are modeled by using the Monte Carlo Simulation (MCS) method. The combination of MCS and RT distribution market simulation based on D-LMPs are used to assess the operation and impact of the DR method over one month. Simulations results on an 84-buses distribution network confirmed that the proposed method allows saving costs for residential end-users and making the distribution network much reliable against network congestions thanks to the use of D-LMPs. (C) 2015 Elsevier Ltd. All rights reserved.