Optimisation and Negotiation: Two Approaches to Demand Response Actions Pricing on Energy Markets

The paper discuss the active Demand Response (DR) problem for large distributed groups of small consumers, and subjects of trading demand elasticity as a product on energy markets. Organization of DR activities in such case is usually considered as a system of three basic functional entities: an energy supplier (i.e. market operator), an aggregator (technical organizer) and an user. The problem of defining the settlement parameters between these stakeholders is usually carried out in the form of a hierarchical optimisation model, maximising profits from trading the resulting flexible energy product. In circumstances when market power of the supplier is not strong enough to impose on the aggregator such monopolistic solution, a more realistic approach may be necessary, relying on use a negotiation approach. In the paper we present the potential profitability simulation study and the results for both cases.