The Impacts of Demand Response on the Efficiency of Energy Markets in the Presence of Wind Farms

In this paper, an optimal scheduling of thermal and wind power plants is presented by using a stochastic programming approach to cover the uncertainties of the forecasted generation of wind farms. Uncertainties related to wind forecast error, consequently wind generation outage power and also system load demand are modeled through scenario generation. Then, with regard to day-ahead and real-time energy markets and taking into account the relevant constraints, the thermal unit commitment problem is solved considering wind energy injection into the system. Besides, in order to assess impacts of Demand Response (DR) on the problem, a load reduction demand response model has been applied in the base model. In this approach, self and cross elasticity is used for modeling the customers' behavior modeling. The results indicate that the DR Programs (DRPs) improves the market efficiency especially in peak hours when the thermal Gencos become critical suppliers and the combination of DRPs and wind farm can be so efficient.