Modeling Load Recovery Impact for Demand Response Applications

In this paper we develop a novel mathematical model to describe the localized economic impact of load recovery by electricity consumers following demand response (DR) event participation. In this model-termed “securitization”-cost and benefit associated with an amount of load recovery change exponentially with time-varying stochastic discount rates. These volatile rates, which can be estimated using the principle of Brownian motion, are further examined via case studies on the Roy Billinton test system. A formal application of the proposed recovery model to the crucial task of global DR scheduling is then studied. The study indicates that it is possible to optimize a DR schedule to cater for uncertainty in the subsequent load recovery.