The Transactions of The Korean Institute of Electrical Engineers (전기학회논문지)

The Korean Institute of Electrical Engineers (대한전기학회)
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Social Welfare Analysis of Demand Response from the Viewpoint of Demand Function

수요함수 관점에서 해석한 수요반응의 사회적 후생 분석

  • Lee, Kwang-Ho (Dept. of Electrical and Electronic Engineering, Dankook University) ;
  • Yang, Kwan-mo (Dept. of Electrical and Electronic Engineering, Dankook University)
  • Received : 2016.11.21
  • Accepted : 2016.12.08
  • Published : 2017.01.01
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Abstract

Social Welfare is useful concept for evaluating the effectiveness of an economic policy in micro economics. This paper focuses on Social Welfare(SW) of electricity market incorporating demand response(DR). Competition between DR and generation company is modeled as a simple bid function. DR function can be considered as an negative generation(called Negawatt) and as an element of modified demand function. These two approaches result in the same demand reduction, generation power, and the market price. However, SW in the modified demand function approach is not identical to SW in the Negawatt approach. It makes the numerical index of DR effectiveness less persuasive. This paper proposes modified definition of SW in the demand function approach. The proposed definition of SW leads the DR effectiveness index to be identical to that in the Negawatt approach.

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References

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