6A Real‐Time Information‐Based Demand‐Side Management System

Demand response is a feature to be achieved in the smart grid. In this chapter, we study a few mechanisms to demonstrate the enhanced efficiency in the smart grid with demand response.

6.1 Background and Related Work

6.1.1 Background

Demand response (DR), also known as demand‐side management system [2729], utilizes real‐time information in order to let the power grid generate and consume energy more efficiently while reducing fuel waste. A DR system is widely agreed to be effective at reducing the peak‐to‐average ratio (PAR) of energy consumption [28, 29, 98]. This improvement helps power suppliers reduce the extra fuel costs caused by dramatic and unpredictable margin fluctuations in power generation. Burning less fuel also helps reduce emission of greenhouse gas from those power generators. Moreover, since the control center gets the energy consumption schedule beforehand [83, 99101], renewable sources such as photovoltaics (PV) and wind turbines, which are less stable and less controllable compared than conventional power generators, can support the power grid more efficiently. A higher proportion of such renewable sources will further reduce the burning of fuel by conventional power generators.

In this chapter, we first propose a centralized optimization problem images in order to reduce PAR to its minimum. Although a minimum ...

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