A full demand response model in co-optimized energy and reserve market

It has been widely accepted that demand response will play an important role in reliable and economic operation of future power systems and electricity markets. Demand response can not only influence the prices in the energy market by demand shifting, but also participate in the reserve market. In this paper, we propose a full model of demand response in which demand flexibility is fully utilized by price responsive shiftable demand bids in energy market as well as spinning reserve bids in reserve market. A co-optimized day-ahead energy and spinning reserve market is proposed to minimize the expected net cost under all credible system states, i.e., expected total cost of operation minus total benefit of demand, and solved by mixed integer linear programming. Numerical simulation results on the IEEE Reliability Test System show effectiveness of this model. Compared to conventional demand shifting bids, the proposed full demand response model can further reduce committed capacity from generators, starting up and shutting down of units and the overall system operating costs.