Estimation of generating costs reduction as a result of demand response

One of the most important aims of time-of-use electricity pricing is to encourage the customers to adjust their load profiles. As a result, the aggregate system load profile of a grid may be more preferable, i.e., the corresponding generating costs, fuel consumption and emission in electricity generation will be reduced. Estimating the potential benefits before the implementation of time-of-use pricing and finding the most satisfactory system load profile are very important in determining the suitable level of electricity prices. In this paper, the potential benefits resulted from demand response were estimated by solving a special kind of security constrained unit commitment (SCUC) problem and the optimal system load profile was also obtained. Numerical testing was performed for two example systems and the results were also analyzed. The proposed method may provide reference for finding suitable pricing strategies.