Incentive Payment Design for Electricity Demand Response

In power systems, the interruptible load management (ILM) plays an important role in boosting demand responses, which can help a power system operator solve a variety of problems. A critical issue is the incentive paid to the consumers to participate in the ILM. It is widely recognized that integration of consumers´ willingness to curtail load in the ILM is helpful to improve the allocation efficiency of the limited electricity resource. In order to design such ILMs, new methods for incentive payment of interruptible load, including the pay-as-you-go method and the pay-in-advance method, are presented, in which the consumers´ type parameters are introduced to model the consumers´ willingness to curtail load. It is shown that consumers with relatively large willingness to curtail load are encouraged to more actively participate in the ILM, and consumers are also encouraged to follow the load interruption dispatch in accordance with their true willingness to curtail load. Numerical examples are presented to validate the reasonableness and effectiveness of the proposed methods.