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A tri-level distribution locational marginal price-based demand response framework
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Date
2025-01-01
Authors
Pandey, Vipin Chandra
Rawat, Tanuj
Ospina, Juan
Dvorkin, Yury
Konstantinou, Charalambos
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier B.V.
Published Version
Abstract
In this paper, we propose a tri-level, nested, two-stage price-based demand response (PBDR) framework that considers distribution locational marginal price (DLMP) as DR enabler between load-serving entities (LSE), demand response providers (DRPs), and customers in the day-ahead distribution market. It enables LSE and customer interactions by using multiple DRPs, positioned in-between, and independently optimizes their objectives. The problem is formulated using linear power flow with approximated power losses and its application in DLMP as DR pricing. The tri-level problem is solved using a nested reformulation & decomposition (R&D) method and tested on the real Indian-108 bus distribution system under various dynamic pricings. Further, the temporal–spatial variations in DLMPs are assessed using fairness criteria. Numerical analyses demonstrate that DLMP applications can effectively improve economic efficiency, and transparency in DR programs valuation with a favorable fairness margin. The results show that DLMP as DR pricing signal induces (0-2) % variation in DLMP for DR participation up to 10 %. Further, it gives over 90 % fairness over temporal–spatial variation for all the customers.
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Keywords
Distribution locational marginal price , Fairness , Price-based demand response , Tri-level optimization
Citation
Pandey, V. C., Rawat, T., Ospina, J., Dvorkin, Y. and Konstantinou, C. (2025) 'A tri-level distribution locational marginal price-based demand response framework', Electric Power Systems Research, 241, 111398 (11pp). https://doi.org/10.1016/j.epsr.2024.111398