Centralized and decentralized control for demand response

Demand response has been recognized as an essential element of the smart grid. Frequency response, regulation and contingency reserve functions performed traditionally by generators are now starting to involve demand side resources. Additional benefits from demand response include peak reduction and load shifting, which will defer new infrastructure investment and improve generator operation efficiency. Technical approaches designed to realize these functionalities can be categorized into centralized control and decentralized control, depending on where the response decision is made. This paper discusses these two control philosophies and compares their response performances in terms of delay time and predictability. A distribution system model with detailed household loads and controls is built to demonstrate the characteristics of the two approaches. The conclusion is that the promptness and reliability of decentralized control should be combined with the controllability and predictability of centralized control to achieve the best performance of the smart grid.