Analysis of Electricity Market Model with Demand Response in Distribution Network

Abstract

The electricity market in Japan is being deregulated and the retail market in Distribution Network (DN) will be fully liberalized in near future. In the liberalized electricity market, the retailer procures and supplies the power for the consumers in DN to maximize the profit under market price uncertainty. On the other hand, the consumers in DN can efficiently control their loads with developing Demand Response (DR) technology and hence power flow in DN can be complicated depending on the DR. However, different kind of the consumers such as residential, commercial and industrial have different DR characteristics. Furthermore, the variation of distribution line loss caused by DR can affect the wheeling rate in DN and the retailer's profit. From this point of view, the decision making of the market players in DN under uncertainty should be modeled considering the kind of consumers and physical state in DN. This paper proposes a novel electricity market model with DR, and a bi-level programming problem based on the Stackelberg game model is formulated to analyze the behavior of players in the market.