Demand bidding/buyback modeling and its impact on market clearing price

The demand bidding/buyback is one of the demand response (DR) programs that encourages large consumers to change their energy consumption pattern and decline their peak load in return for financial rewards. This procedure is useful for both the consumers and system operator (SO) and improves market efficiency by providing the opportunity for consumers to change the market clearing price (MCP) in peak hours. For our purpose, a proposed model has been developed for optimizing the load change bids in demand side. market clearing price is then determined from SO point of view considering the demand side bidding. In this paper the economics of the proposed process for demand bidding has been analyzed from both demand side and system operator point of view. Finally, the proposed model has been applied on CIGRE 32-bus test system. The results show a decrease in market clearing price (MCP) and an increase in profit of participants.