A Bilevel QP-PLP Approach to Demand Response Modulation between Consumers and a Single Electricity Seller
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Abstract
During the peak hours, electricity becomes extremely expensive to produce and deliver and this causes a negative effect both to the suppliers and consumers. From the producer point-of-view, real-time pricing may be implemented to incentivize the consumers to shift their load usage to off-peak hours. That is, to adjust for a lower price during off-peak hours and for a higher price during the on peak hours. On the other hand, the consumers would then respond optimally to the given strategic prices by means of flexible load scheduling and incorporation of smart energy management systems. We present in this paper an intermediate model that maximizes the profit of the supplier while maintaining the low expenses of the consumers by using a bilevel program of the form QP-PLP, where the upper-level problem is quadratic and the lower-level problem is a parametric linear program.
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