Implementation of fast and effective dynamic pricing schemes in Smart Grids

This article shows how demand elasticity and inverse demand curves for distribution systems can be calculated based on the aggregation of information obtained from Smart Grids. These can be used in the implementation of dynamic pricing schemes. This article discusses how the response time of dynamic pricing schemes operation can be reduced by using demand elasticity information and also the necessary conditions to preserve their effectiveness. Two main aspects are identified and analyzed: use of elasticity instead of full demand curve, and location of decision making mechanisms at Demand-Response Management System (DRMS).