Integrated dispatch of generation and load: A pathway towards smart grids

With large scale integration of intermittent renewable energy such as wind and solar, it is becoming a challenge to maintain the power balance by purely dispatching generation. Demand-side resources should be utilized to (1) avoid the prohibitive investment in backup generation and (2) dance with intermittent renewable generation. To reap the potential benefits from the demand side, we propose a new framework termed integrated dispatch of generation and load (IDGL). In IDGL, the load adjustment cost (LAC) is introduced to express the willingness of customers to change their consumption levels. A formulation of IDGL is proposed in which the customer responses, such as load shifting and consumption mode switching, can be explicitly modeled. We also present a new settlement mechanism in which the load adjustment costs of responsive customers are paid by non-responsive customers. The advantage of this mechanism is that customers are guided to bid according to their real LACs. Case studies based on the IEEE 30-bus system and a real-world power system in China demonstrate the effectiveness and the economic benefits of IDGL.