Managing demand response for manufacturing enterprises via renewable energy integration

Large manufacturing firms usually sign a specific demand response contract with the utility provider, and agreed to curtail the load upon request. Both the curtailment time and the reduction level are uncertain prior to the contingency call. In response, manufacturing firms could turn off the machines or slow down the production under the revenue losses. In this paper, we propose a new demand response scheme in which the manufacturer adopts wind and solar energy as the power reserve to achieve the load reduction compliance. We leverage the well-known newsboy inventory model to determine the optimal capacity of renewable generating units with the goal to maximize the manufacturer´s electricity savings.