A Cluster-based Appliance-level-of-use Demand Response Program Design

The ever-intensifying threat of climate change renders the electric power system undergoing a profound transition toward net-zero emissions. Energy efficiency measures, such as demand response, facilitate the transformation to jointly relieve consumers’ financial burden and improve the operability of the electric power grid, in a carbon-free way. In this paper, we design a cluster-based appliance-level-of-use demand response program, based on the massive volume of appliance consumption data, to expand the role demand response can play in the power grid’s low-carbon transition. We systematically model the appliance-level utility function to distinguish consumers’ distinct consumption patterns. We then develop a bi-level optimization model to capture the interactions between individual consumers and a distribution system operator (DSO) and enable appliance-level-of-use demand response functions. To further improve the efficiency and scalability of the proposed mechanism, we propose a cluster-based approach to capture the heterogeneity of users based on their energy consumption behaviors. Simulation results show that by capturing the detailed appliance-level response patterns, the proposed approach can systematically improve overall social welfare compared with conventional demand response mechanisms.