Demand-side system reserve provision in a stochastic market model

The complexity and cost of maintaining power system security using only supply-side mechanisms are likely to increase in the future. Advances in control and information technology offer a possibility for the demand to participate in the system reserve market. By providing reserve, consumers could maximize their benefits derived from electricity markets. This paper presents a new approach to the stochastic modeling of the demand-side reserve provision in co-optimized electricity and reserve markets. A new method for the demand reserve offer price function (DROPF) is proposed. The method accounts for the costs and benefits that consumers derive from participating in the reserve market. The proposed method was tested on IEEE Reliability Test System and the results show that demand flexibility has a great influence on demand-side reserve provision, as well as on the benefits that consumers gain from reserve provision and on the security cost.