Scheduling a storage-augmented discrete production facility under incentive-based demand response

Demand response (DR) is considered as one of the most important measures for balancing energy supply and demand in the smart grid paradigm. Incentive-based programs, one manifestation of DR, contribute to short-term system stability and prevent critical periods when system stability is at risk by enabling the system operator (SO) to directly change total energy demand. The fact that a third party would be empowered to interfere with internal operations is, however, also one of the major drawbacks of DR that prevents especially industrial consumers from participating with full capacity in such programs. This paper considers an alternative Incentive-based program with application to a discrete manufacturing facility where load reduction curves (LRCs) are generated a priori outlining the potential load reduction in the DR period. The SO uses the LRC to determine the desired level of load reduction for critical periods. To illustrate the generation of the LRC, this paper builds on a flexible flow shop (FFS) formulation for a discrete manufacturing facility and presents a model that includes multiple machine modes and product- and machine-specific energy consumption trajectories. Based on the FFS, a procedure is developed to generate the LRC. The paper also investigates the potential of including a battery energy storage system (BESS) into the production facility and illustrates the effects of the BESS on the LRC.