Reliability enhancement and price reduction of restructured power system with probabilistic day-ahead real time pricing contract

Lack of demand response has always been the main reason for price increasing, shortage of production capacity and system risk increasing as the electricity markets have been greatly involved during the past years. In Electricity market, the exchanges are profitable for producers and consumers when both can participate freely. Based on this new environment, we are currently facing with a new concept as demand-side participation or demand response. There are several demand response programs that accurate pricing of each them is the major challenge that retailers and market operators are facing with. In this article the day-ahead real time pricing contract (DA-RTP) based on two different customer demand benefit function has been modeled and then has been priced based on probabilistic methods. This method has been tasted in IEEE-RTS. Simulation results indicate improved system and nodal reliability indices, and the prices are also reduced.