An Improved Mechanism Design of Demand Response for Reliability and Flexibility Based on Monte Carlo Method and Enhanced Benders Decomposition

Demand side management is regarded as a silver bullet to enhance system flexibility and reliability for accommodating renewable energy and improving operation efficiency. This paper proposes a reliability and flexibility-oriented demand response market, including the demand curve calculation and market clearing mechanism. The relationship between system reliability and the amount of demand response is calculated based on the Monte Carlo method. Accordingly, the value of demand response in enhancing system reliability is obtained. Then, the demand curve for the demand response market is built based on system reliability index, which accurately reflect the relationship between demand response’s value and amount. A market clearing method is further proposed for enhancing system flexibility by considering the flexible constraints of demand response. Finally, the complex market clearing problem is addressed via the enhanced Benders decomposition. The proposed method is tested on the IEEE RTS-79 system. Numerical results illustrate the validity of the proposed method in enhancing system reliability and flexibility.