Demand response for smart grids with solar power

We study demand response (DR), supply management and power scheduling in a smart grid in the presence of photovoltaic sources such as solar panels. We aim to increase efficiency and reliability of the grid by limiting the probability of power shortfall, which is introduced to the system by the uncertainty in the solar power production. Total social welfare, defined in terms of consumer utility and total cost of power imposed on the provider, is maximized subject to a constraint on the probability of power shortfall, which reflects the degree of deficit risk taken by the provider. Two distinct DR mechanisms are developed for optimal production and consumption scheduling during day and night. The behavior of both supply and demand sides are investigated under changing cost parameters. It is shown that the deficit-limiting approach to DR management presented in this paper outperforms a competitor that equates power generation to consumption on the average.