Introducing a new approach to improve demand response pricing for industrial customers in Iran

In recent years, electricity consumption growth and gradual penetration of renewable energies in electricity production, have increased the need for designing appropriate demand response programs. Determining an encouraging incentive rate for participation of customers in these programs is very important. In this paper, we introduce a new approach to determine an optimal incentive rate for incorporating large industries in demand response programs. These programs include decreasing peak demand and providing system reserve, by means of joint energy/reserve market framework. The objective of this approach is to minimize system costs in peak hours of the year, considering customers’ price offers for providing energy and reserve. To assess the performance of the method, a case study has been conducted on IEEE-RTS 24 standard grid. Results show the capability of the proposed method in lowering system costs.