Market models and optimization techniques to support the decision-making on demand response for prosumers

Abstract

Demand Response (DR) programs are essential for easing end-user demand on the power system, adding benefits across the power sector by reducing peak demand and power flow congestion. With the modernization of power grids, DR programs ensure the integration of Distributed Energy Resources (DER) in a controlled manner through Advanced Metering Infrastructure (AMI), which enables communication between grid operators, prosumers and consumers. However, the diversity of DR programs, the spread of DERs, the advent of prosumers, and the several types of power trading among system entities make network and market operation more complex. In this context, optimization methods have been widely applied in distribution grids and market operation, assisting in the decision-making of DER management, prosumer's and consumers' welfare, and DR program applications. This work will address the main market models comprising DR programs to assess opportunities in prosumers' decision-making with the help of optimization tools. Thus, different optimization techniques are introduced that have been addressed in the literature aiming at the application of market models, taking into account the pro -sumer framework. As a whole, this review paper aims to present the main perspectives of energy market models with demand-side management actions considering the prosumer design.