Evaluation Model of Demand Response Potential Based on Cost-benefit Analysis

In the current economic environment, cost control has become the focus of every business operation. On the premise that the load resources owned by the user have depreciation or transfer costs, the economic benefits of the demand response project are the driving factors for the user to consider whether to participate. The economic cost-benefit analysis method is taken to evaluate the demand response potential, and the potential type is divided into permanently saved load and temporary adjustable load. Energy saving upgrading of electrical equipment and infrastructure is used to assess the potential of permanently saved load. The method is to compare the unit power saving cost with the electricity price to be paid. When the unit power saving cost of the user is lower than the electricity price, it implies that the benefit is greater than the cost, which is indicating an incentive effect. The lower the unit power saving cost will be, the more revenue of the user will be obtained, which promotes the expansion of the potential. The temporary adjustable load refers to the peak shifting load including peak-clipping and valley-filling functionality, and the potential can be obtained via the optimization of the economic cost-benefit function. The economic cost-benefit function is formulated from the gap between the expected benefit and the required cost. The function value greater than zero indicates a positive incentive effect. The larger function value is more beneficial to user participation.