ISO's Optimal Strategies for Scheduling the Hourly Demand Response in Day-Ahead Markets

This paper presents a hierarchical demand response (DR) bidding framework in the day-ahead energy markets which integrates customer DR preferences and characteristics in the ISO's market clearing process. In the proposed framework, load aggregators submit aggregated DR offers to the ISO which would centrally optimize final decisions on aggregators' DR contributions in wholesale markets. The hourly load reduction strategies include load shifting and curtailment and the use of onsite generation and energy storage systems. The ISO applies mixed-integer linear programming (MILP) to the solution of the proposed DR model in the day-ahead market clearing problem. The proposed model is implemented using a 6-bus system and the IEEE-RTS, and several studies are conducted to demonstrate the merits of the proposed DR model.