Effect of price responsive demand on the operation of microgrids

In this paper, a demand elasticity model is developed and tested for the dispatch of microgrids. The price obtained from dispatching the network in a base-case scenario is used as input to a demand elasticity model; this demand model is then used to determine the price-responsive demand for the next iteration, assuming that the load schedule is defined a day ahead. Using this scheme, trends for demand, hourly prices, and total operation costs for a microgrid can be obtained, to study the impact of demand response on unit commitment. This way, for a microgrid, the effect on the scheduling of diesel generators and energy storage systems can be analyzed with respect to price-elastic loads. The results for a benchmark microgrid show that the proposed 24-hour model eventually converges to a steady state, with prices and costs at their lowest values for different scenarios. Moreover, it is confirmed that elastic demand in a microgrid reduces electricity price variability and mitigates the need for storage in the presence of high penetration of renewable energy.