A Distributed Scheme for Incentive-based Residential Demand Response

Demand response (DR) enables customers to adjust their electricity usage to balance supply and demand. Although commercial and industrial DR have been in use for decades, residential DR is still emerging. The goal of this paper is to design a DR scheme for residential customers. We consider households operating various appliances and propose a distributed DR scheme to manage the appliances to keep the total demand of the households below a certain limit. Customer preference is captured by utility functions which measure the customer’s benefit or comfort obtained from running a particular appliance. The loss of comfort for customers in DR is minimized by maximizing the aggregate customers’ utilities. The proposed residential DR scheme is fully distributed and customer privacy is protected in the DR process in terms of no appliance-level information being exposed. As one demonstration, we apply the proposed DR scheme at the distribution level to solve the distribution transformer overloading problem. An interesting rebound effect of DR which creates a new peak after the DR ends is observed in the simulation. We study the effect using a worst-case analysis and propose to add a protection period in the DR schedule to prevent the rebound effect.