A collaborative design of aggregated residential appliances and renewable energy for demand response participation

Though the locational marginal price (LMP) may change dramatically within a single day in competitive wholesale electricity markets, most end-users are charged monthly electricity bills over flat rates. Without financial incentives, the customers are lacking of motivation to respond to the price signals, which may result in inefficient energy consumption. In Texas, Senate Bill 1125 encourages qualified residential and commercial customer classes to participate in demand response programs. This paper proposes an idea to aggregate a number of residential customers to participate in residential demand response program by employing smart appliances and a home area network to shift the coincidental peak load to off-peak hours to reap financial benefits. The operation strategies for the most representative residential load types are discussed. To further reduce electricity purchase and cut electricity bills, a solar farm with energy storage system is proposed and the control algorithm is designed accordingly. The operation strategies are simulated for a whole year and the annual costs are calculated and compared in this study. The results show that by doing load control and utilizing renewable resources, the total cost can be reduced significantly.