Demand Side Management Using Time of Use and Elasticity Price

Demand Side Management (DSM) has been traditionally seen as a mean of reducing peak electricity demand so that utilities can delay building further capacity. In fact, by reducing the overall load on an electricity network, DSM has various beneficial effects, including mitigating electrical system emergencies, reducing the number of blackouts and increasing system reliability. In this paper we propose a methodology to evaluate DSM in electric distribution systems, based on elasticity and time of use pricing concepts. This evaluation is performed through an optimal power flow model considering linear constraints. The results of the proposed method depend, to a great extent, on two parameters: the maximum share of load which consumers are able to shift and the elasticities used to express the consumer's level of participation in the dynamic pricing mechanism. Simulation results confirm the benefits of Time of Use Demand Side Management reducing the peak-to-average ratio of the total power demand, as well as each user's individual daily electricity charges.