Demand Response Program Implementation for Day-Ahead Power System Operation Mohamed Lotfi, João P. S. Catalão FEUP and INESC TEC Porto, Portugal mohd.f.lotfi@gmail.com; catalao@fe.up.pt Mohammad S. Javadi INESC TEC Porto, Portugal msjavadi@gmail.com Ali E. Nezhad University of Bologna Bologna, Italy ali.esmaeelnezhad@gmail.com Miadreza Shafie-khah University of Vaasa Vaasa, Finland miadreza@gmail.com Abstract—This paper demonstrates day-ahead operation of power systems in the presence of a Demand Response Program (DRP) for serving exact amounts of demanded energy over the operational horizon. The proposed two-stage model features a here-and-now framework for shaping the aggregated demands during operation. First, the day-ahead scheduling problem is solved by adopting Unit Commitment (UC) to determine the generation level of power generation units as well as the Locational Marginal Prices (LMPs). Afterwards, the obtained LMPs are considered as the Time of Use (ToU) for the second step of the scheduling and reshaping the demanded loads of each aggregator. A new methodology is provided in this paper to estimate the reaction of consumers behavior in terms of encouraging their participation in DRPs. Unlike classical models which adopt load reduction over the operational horizon, this model ensures that the total demanded loads will be served. Therefore, the total supplied energy for the operational period before and after DRP implementation remains unchanged. Meanwhile, the total payment of consumers will be considerably reduced by adopting this strategy. The simulation results on the 6-bus test system clarify that the proposed model can reduce the total operational cost as well as smoothen the load profile and nodal prices over the operational horizon. Index Terms—Day-ahead Energy Market, Demand Response Programs, Locational Marginal Price, Time of Use, Unit Commitment, Aggregator. NOMENCLATURE Indices i Index for bus L Index for line S Index for segments of cost function t,t' Index for time Variables PGi,t Power generation of unit i at time t PDi,t Demand at bus i at time t Ci,t Start-up cost of unit i at time t SUi,t Binary decision variable of start-up SUCi,t Start-up cost of unit i at time t SDi,t Binary decision variable of shut-down SDCi,t Shut-down cost of unit i at time t Ii,t Binary decision variable of unit commitment Pi,t s Power generation at segment s of unit i δ Voltage bus angle λi,t Locational marginal price at bus i at time t Parameters MGCi Minimum generation cost of unit i at time t NB Number of thermal units NT Number of hours under study NL Number of transmission lines RUi Ramp-up for unit i RDi Ramp-down for unit i Xl Reactance of transmission line l SLi s Slope of segment s for unit i NS Number of linearization segments α, β Acceptable range for DR implementation ω Maximum acceptable change for hourly demand Ti on , Ti off Minimum up/down time of unit i Symbols max, min Maximum and Minimum New, Old After and before DR implementation S, R Sending, Receiving end bus I. INTRODUCTION A. Motivation Demand Response Programs (DRPs) have been attracting increasing attention as an effective means of minimizing operating costs, enhancing reliability, and mitigating risk. DRPs can be categorized into two groups: Price-Based Programs (PBP) and Incentive-Based Programs (IBP) [1].