Dynamic incentive strategy for voluntary demand response based on TDP scheme

The enhanced real-time metering and communication capabilities from smart meters and their associated advanced metering infrastructure make it possible for utility company to extend demand response (DR) to small customers through time-dependent pricing (TDP). Considering the economic reason and infrastructure cost, the utility company has to design an incentive scheme to attract the traditional flat pricing (FP) users to be engaged in the TDP scheme. In this process, the utility company may share its revenue from the TDP scheme to those TDP users. It is found, with properly analyzing the energy procurement cost and user elasticity, a dynamic incentive strategy can be considered in dual-tariffs system when flat pricing (FP) and TDP pricing are co-existed. This dynamic incentive strategy gives appropriate stimulus to the users who are involved into the TDP program, and guarantee the utility company´s profit at the same time.