Optimal Customer Targeting for Sustainable Demand Response in Smart Grids

Abstract Demand Response (DR) is a widely used technique to minimize the peak to average consumption ratio during high demand periods. We consider the DR problem of achieving a given curtailment target for a set of consumers equipped with a set of discrete curtailment strategies over a given duration. An effective DR scheduling algorithm should minimize the curtailment error - the difference between the targeted and achieved curtailment values - to minimize costs to the utility provider and maintain system reliability. The availability of smart meters with fine-grained customer control capability can be leveraged to offer customers a dynamic range of curtailment strategies that are feasible for small durations within the overall DR event. Both the availability and achievable curtailment values of these strategies can vary dynamically through the DR event and thus the problem of achieving a target curtailment over the entire DR interval can be modeled as a dynamic strategy selection problem over multiple discrete sub-intervals. We argue that DR curtailment error minimizing algorithms should not be oblivious to customer curtailment behavior during sub-intervals as (expensive) demand peaks can be concentrated in a few sub-intervals while consumption is heavily curtailed during others in order to achieve the given target, which makes such solutions expensive for the utility. Thus in this paper, we formally develop the notion of Sustainable DR (SDR) as a solution that attempts to distribute the curtailment evenly across sub-intervals in the DR event. We formulate the SDR problem as an Integer Linear Program and provide a very fast -factor approximation algorithm. We then propose a Polynomial Time Approximation Scheme (PTAS) for approximating the SDR curtailment error to within an arbitrarily small factor of the optimal. We then develop a novel ILP formulation that solves the SDR problem while explicitly accounting for customer strategy switching overhead as a constraint. We perform experiments using real data acquired from the University of Southern Californias smart grid and show that our sustainable DR model achieves results with a very low absolute error of 0.001-0.05 kWh range.