Demand response resource allocation method using mean-variance portfolio theory for load aggregators in the Korean demand response market

Jaeyong Chae, Sung-Kwan Joo

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Since the demand response (DR) market was introduced in Korea, load aggregators have also been allowed to participate in the electricity market. However, a risk-management-based method for the efficient operation of demand response resources (DRRs) has not been studied from the load aggregators' perspective. In this paper, a systematic DRR allocation method is proposed for load aggregators to operate DRRs using mean-variance portfolio theory. The proposed method is designed to determine the lowest-risk DRR portfolio for a given level of expected return using mean-variance portfolio theory from the perspective of load aggregators. The numerical results show that the proposed method can be used to reduce the risk compared to that obtained by the baseline method, in which all individual DRRs are allocated in a DRR group by maximum curtailment capability.

Original languageEnglish
Article number879
JournalEnergies
Volume10
Issue number7
DOIs
Publication statusPublished - 2017

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Resource allocation
Risk management
Power markets

Keywords

  • Demand response resource
  • Expected return and risk
  • Load aggregators
  • Mean-variance portfolio theory

ASJC Scopus subject areas

  • Computer Science(all)

Cite this

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