A Demand Response Scheme for Wind Integrated Power System Based on Mechanism Design Theory

The increasing integration of high penetration of wind power into power systems have created great challenges for stable operation of the power system. It is important to design a reasonable demand response scheme (DRS) to make decision the optimal load relief, specially, for the wind power suppliers (WPS) and their customers (WPSC). Therefore, this paper proposes a demand response scheme for wind integrated power system based on mechanism design theory. Firstly, we derive the outage cost function and incentive function modeled by the two variables: the customers' type parameter and the location value. Secondly, incorporate customers' type parameter and locational flexibility into the DRS, and based on game theory, a demand response scheme with incentive compatible constraint and participation constraint is designed to maximize the benefit both the wind power suppliers and their customers. The implication of demand response scheme is to design an incentive structure that encourages customers to sign up for the right scheme and reveal their true value of load reduction. Finally, the eight-bus system example can demonstrate the effectiveness of the proposed method.