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.