Combined price and event-based demand response using two-stage model predictive control

Demand Response is a key enabler for the shift from a generation-oriented system towards a consumption-oriented electrical grid known as the Smart Grid. This paper proposes a Model Predictive Control scheme enabling a combination of both price and event-based Demand Response. The controller is divided into two stages where the first consists of an optimization which takes dynamic prices into account, whereas the second stage calculates power reduction offers for an Aggregator. The proposed method is validated through a simulation case study, where a single apartment is modeled in EnergyPlus and an electric heater is regulated by the two-stage controller. The results show that the first stage shifts consumption from high to low-price periods, leading to an 8% increase in energy consumption but a 7% reduction in energy costs. The second stage continuously provides hourly power reduction offers for a 24 hours period. The offering price of these bids depends largely on the notification time and the baseline consumption. Results show that in certain time periods these bids can be provided at a very low cost compared to the average energy cost.