Available transfer capability calculations considering demand response

This paper investigates the impact of price-based demand response (DR) programs on available transfer capability (ATC) in deregulated electricity markets. A bi-level optimization model which considers both the interests of load serving entities (LSE) and independent system operators (ISO), has been established. The upper level of the proposed model selects the DR participants by minimizing the DR compensation cost and power purchasing cost, while the lower level conducts economic dispatch and determines the locational marginal prices (LMP). The bi-level optimization problem is first converted to a mathematical programming problem with equilibrium constraints (MPEC) by reformulating the lower level problem as its KKT conditions. Then, the nonlinear terms are eliminated by applying the strong duality theory. Thus the original problem is transformed into a mixed-integer linear programming (MILP) problem, which can be easily solved by the GAMS. The performance of the proposed method is tested on the IEEE 30-bus system. Simulation results validate the effectiveness.