Optimal Demand Response: Problem Formulation and Deterministic Case

Part of the Power Electronics and Power Systems book series (PEPS, volume 3)


We consider a set of users served by a single load-serving entity (LSE). The LSE procures capacity a day ahead. When random renewable energy is realized at delivery time, it manages user load through real-time demand response and purchases balancing power on the spot market to meet the aggregate demand. Hence, optimal supply procurement by the LSE and the consumption decisions by the users must be coordinated over two timescales, a day ahead and in real time, in the presence of supply uncertainty. Moreover, they must be computed jointly by the LSE and the users since the necessary information is distributed among them. In this chapter, we present a simple yet versatile user model and formulate the problem as a dynamic program that maximizes expected social welfare. When random renewable generation is absent, optimal demand response reduces to joint scheduling of the procurement and consumption decisions. In this case, we show that optimal prices exist that coordinate individual user decisions to maximize social welfare, and present a decentralized algorithm to optimally schedule a day in advance the LSE’s procurement and the users’ consumptions. The case with uncertain supply is reported in a companion paper.


Utility Function Model Predictive Control Aggregate Demand Demand Response Spot Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Lijun Chen
    • 1
  • Na Li
    • 1
  • Libin Jiang
    • 1
  • Steven H. Low
    • 1
  1. 1.Engineering and Applied ScienceCalifornia Institute of TechnologyPasadenaUSA

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