Incentive Mechanism for SCDL-Based Demand Response

Demand response (DR) is an effective approach to enhance power system flexibility by leveraging customer participation, particularly in light of the increasing integration of renewable energy (RE). However, existing mechanisms often provide uniform DR signals without considering the significant diversity in customers' energy consumption characteristics. Our recent work proposed a personalized DR scheme based on Sub-Customer Directrix Load (SCDL) to reduce customers' DR regulation costs. To build upon this concept, this paper proposes a comprehensive DR framework and incentive mechanism suitable for SCDL implementation. The proposed DR framework and incentive mechanism span three layers: ISO, load aggregators (LA), and DR customers to achieve win-win results through coordination. The implementation process of the SCDL-based DR mechanism is demonstrated, and the collaborative interaction among the three layers is depicted using a two-loop Stackelberg game to achieve an equilibrium solution. Case studies validate the effectiveness of the proposed DR framework and incentive mechanism, significantly improving the DR effect and achieving equilibrium among entities in different layers.