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.