A novel economic model for price based demand response
Abstract This paper proposes an economic model for the demand response which can explain the change and the cross period shift in consumption pattern of individual consumers. The objective of the proposed model is to maximize the customer utility constrained by either the daily budget or daily consumption. To develop the proposed model, first, the customer utility function is described and maximized. Then, the selection of the proper parameters for the model is discussed by sensitivity analysis. Next, an algorithm is proposed to apply the model to a TOU demand response program. Subsequently, the proposed algorithm is employed to apply the model to a case study. The results demonstrate the power of the model in explaining the change and cross period shift in consumption pattern.