I. Introduction
Load fluctuations are becoming increasingly serious due to the integration of both large scale intermittent energy sources (e.g., wind and solar power) and new loads (e.g., electric vehicle load) to the grid. This will not only require the electric power system to perform better in frequency regulation and peak shaving but also challenge operators in economic assessment under the environment of electricity market. Traditionally, it is considered that end users’ are inelastic and the adjustment of generators is the only effective way to keep real-time supply-demand in a balance. However, too frequent control times increase the mechanical stress on these generators [1] and the increased capacity of spare generators causes huge waste due to too little usage time. Recent developments in smart grid, particularly the two-way communication network and advanced metering infrastructure, can enable end-users to obtain informed electricity price and communicate with control centers [2]. Thus, it becomes possible to adjust end-users’ loads to participate in the system operation. As one of the key technologies of smart grid, demand response (DR) has been widely accepted for the reason that it is able to relieve the tension of supply-demand unbalance, strengthen the grid’s ability of dealing with power fluctuations, improve energy efficiency and reduce the economic loss of utilities. Among all flexible loads, air conditionings (ACs) can shift load within a certain time and have attracted much more attention [3], [4].