Demand Side Management in Smart Grid: A Dynamic-Price-Based Demand Response Model

Demand side management (DSM) is an important way to achieve smart energy management. Herein, a dynamic price (DP)-based demand response (DR) model is developed for DSM in smart grid. The proposed DR model can shift the peak electricity demand, thereby improving the power system stability and reliability. In a district-scale smart grid with a high photovoltaic power penetration, the energy service provider (ESP) optimizes the DP to maximize its utilities and reduce the load fluctuation while minimizing the bills and dissatisfaction of electricity consumers (ECs). The game theory model is used to explore the interaction between ESP and ECs, and the existence of Nash equilibrium is proved. The proposed DR model is validated with real-world data from a commercial and residential cluster in Suzhou City, Jiangsu Province, China. The results show that the peak electricity demands of commercial and residential ECs decreased by 4.99% and 9.99%, respectively, through the proposed DR model. Meanwhile, the ESP's net profits increased by 7.13% and 2.37%, respectively, while ensuring the ECs’ benefits. The results also demonstrate that the proposed DR model is robust in different scenarios. This article contributes to the effectiveness and efficiency of energy engineering management.