Game Theoretic Contribution of Demand Response in Real Time Power Provision of Distribution System Operator

With increase of renewable energy penetration, mitigating the power fluctuations in real-time demands a higher spinning reserve. Distribution System Company (DISCO) performs an optimization problem for the next day with the predicted load. In real time, due to fluctuations of renewables, DISCO uses DR to counteract the fluctuations of renewables. DR is provided by parties called demand response aggregators (DRA) which collect the DR powers from residential and commercial buildings and offer them to DISCO. The aggregators are competing to sell the amount of demand response to DISCO for next 5 or 15 minutes ahead. The competition is modeled with incomplete information Bayesian game theory. Best response of each aggregator is derived and the aggregate power of DRAs are offered to DISCO. DISCO performs an optimization to meet the load demand in real-time market with demand response contributing to remove the unbalance between load and power procurement in real time. By including the offset of demand curve, DISCO can optimize the amount of power purchased from DRAs. Day ahead as well as real-time optimizations of DISCO have been analyzed in this paper and contribution of DR as well as other factors have been presented.