Integration of price-based demand response in DisCos' short-term decision model

Amir Safdarian*, Mahmud Fotuhi-Firuzabad, Matti Lehtonen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

95 Citations (Scopus)


Real-time electricity prices along with demand-side potentials can provide distribution companies (DisCos) with considerable financial and technical benefits compared to the conventional flat prices. This paper incorporates demand response in DisCos' short-term decision model in a real-time pricing (RTP) environment wherein consumers are charged based on hourly varying prices. Besides the hourly RTP sale prices, the established model deals with other DisCo's short-term activities including hourly purchases from the grid, commitment of distributed generation (DG) units, dispatch of shunt compensators, and invocation of load curtailments (LCs). The stochastic nature of wholesale market prices and customers load is also considered in the model. The model is a mixed integer linear programming (MILP) problem which can be easily solved via commercial software packages. The objective is to maximize the DisCo's expected profit while its revenue is limited by regulating bodies. A typical Finnish 20 kV urban distribution network is used to demonstrate the effectiveness of the established model. Simulation results are presented and discussed to investigate the impacts on both financial and technical aspects of using of RTP sale prices.

Original languageEnglish
Article number6862928
Pages (from-to)2235-2245
Number of pages11
Issue number5
Publication statusPublished - 1 Sep 2014
MoE publication typeA1 Journal article-refereed


  • Demand response
  • distribution company
  • real-time electricity pricing
  • short-term operation


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