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Paper accepted for presentation at 2003 IEEE Bologna Power Tech Conference, June 23th-26th, Bologna, Italy

Direct Load Control as a Market-Based


Program in Deregulated Power Industries
Zeljko N. Popovic, and Dragan S. Popovic, Member, IEEE

Abstract-- This paper focuses on design of direct load control


of customer's appliances as a market-based program in
deregulated power industries. The methodology based on linear
programming, for determining direct load control scenarios and
evaluation of their capabilities to compete with generation in
deregulated power markets is proposed. Quantitative results
showing effects of direct load control of water heaters and air
conditioners in a real-life power system are presented.
Index Terms-- electricity and ancillary service market,
demand-side programs, direct load control, linear programming.

I. INTRODUCTION

UE to tight markets for capacity, excessive price


volatility and increasingly frequent reliability events,
various demand-side programs were implemented in
deregulated power industries. These programs were initiated
to provide loads to compete with generation in deregulated
wholesale energy supply market and thus provide an
additional mechanism to enhance system reliability and reduce
price volatility. The majority of implemented demand-side
programs in today's electricity markets utilized individual
curtailable and/or interruptible load [1]-[4]. However, utility
load management (LM) programs such as direct load control
and time-of-use pricing constitute a large installed base of
controllable load [5]-[8]. Including these loads, through
properly modified and improved operation of utility LM
programs, to compete with generation will additionally
improve efficiency of electricity and ancillary services market.
In this paper is discussed a possibility of designing a direct
load control (DLC) of customer's appliances as a marketbased program whereby aggregate loads (mostly households)
would compete with generators in the electricity markets.
More specifically, the loads can offer bids for power reduction
at the same time with generator bids at periods when various
occasions (e.g. increased demand, transmission congestion)
could lead to unreasonable increasing of energy prices. By
introducing DLC as a market-based program the buyers of
electricity have to determine DLC scenario that enables
certain amount of load reduction to be offered in the
electricity market. For determining DLC scenario a procedure,
based on linear programming model, is proposed. The

proposed model enables determination of all elements of


direct load control scenario (number of groups of controlled
devices, number of devices within each group, on/off schedule
for each group, control periods for each group) when different
types of devices are controlled simultaneously (e.g. water
heaters, air conditioners, electric space heaters, electric
storage heaters, etc.). Also, it is capable of including all
possible control schemes for each type of controlled devices,
taking into consideration constraints imposed by customers
demands (e.g. customer comfort) as well as demands
(constraints) which might be imposed by system operator
(ISO,TSO) (e.g. beginning and duration of interruption period
during a day). Through the application of the proposed model
the buyers of electricity (retailers, discos) can obtain DLC
scenarios which enable various amounts of load reduction by
interrupting (utilizing) different number of controlled devices.
In this way, the buyers can determine the most profitable
combination of price and amount of load reduction to be
offered in the electricity market.
The proposed model is applied on real-life power system in
which different number of water heaters and air conditioners
are controlled simultaneously. The effects of DLC of various
numbers of controlled devices have shown that DLC is
meaningful demand-side program and could significantly
improve customer participation in competitive markets for
electricity and ancillary services.
II. MATHEMATICAL MODEL
A linear programming model, for determining amount of
load reduction and corresponding DLC scenario when
different types of devices are simultaneously controlled, is the
following:
nCD

min c j x Mj

(1)

Subject to:
P Pmax ,

(2)

j =1

P +

nCD n j

A j ,k ,i x j ,k ,i 0 , i=1,..,nC,

(3)

j =1k =1

nCD n j

P A j ,k ,i x j ,k ,i 0 ,
j =1k =1

Z. N. Popovic is with Electric Power Company of Serbia, Elektrovojvodina,


Novi Sad, Yugoslavia (e-mail:zeljko.popovic@su.ev.co.yu)
D. S. Popovic is with University of Novi Sad, Novi Sad, Yugoslavia (email: dpopov@uns.ns.ac.yu).

0-7803-7967-5/03/$17.00 2003 IEEE

Pmax

nCD n j

A j ,k ,i x j ,k ,i d i , i= nC+1,...,nDLC,
j =1k =1

(5)

nj

[C ] j ,k [X ] j ,k xMj 0 , j=1,....,nCD

(6)

x j ,k ,i z j xMj 0 , j=1,....,nCD

(7)

k =1
n j n j ,k

k =1 i =1
xMj M j

(8)

, j=1,....,nCD

where:
cj
cost (weighting factor) of controlling j-th type
devices,
x Mj
number of controlled devices of j-th type,
unknown amount of load reduction,
P
nj
number of different control schemes for j-th type of
device,
nCD
number of different types of controlled devices,
prespecified period of the day (number of 15nC
minutes lasting periods) when load reduction is demanded
(e.g. imposed by system operator),
nDLC
period of the day (number of 15-minute lasting
periods) when is observed DLC influence of all controlled
devices on the shape of system load curve,
Pmax prespecified amount of load reduction,
di
forecasted 15-minute load of the observed system
Pmax
forecasted peak load of the observed system,
number of controlled devices of j-th type, for
xj,k,i
control scheme k in the period i,
Mj
available number of controlled devices of j-th type
maximal number of control "cycles" (disconnection
zj
and connections) for j-th type of controlled device during
control period,
Aj,k,i
known value which describes a load control
influence of j-th type devices on the system load curve,
P j ,k ,i during disconnection periods

(9)
A j ,k ,i = P jpb
,k .i during payback periods
0,in other cases

Pj,k,i
diversified load of j-th type device for control
scheme k at period i,
P pb
net restore demand of j-th type device for control
j,k ,i
scheme k at period i.
Matrix [C]j,k and column vector [X]j,k have the following
forms:

[C]j,k=

1
2
3
.
.
.
.
lj,k
.
.
.
.
lj,k+nj,k-1

1
1
1
1
1
1
1
1
1
0
0
.
.
0

2
0
1
1
1
1
1
1
1
1
0
.
.
0

3
0
0
1
1
1
1
1
1
1
1
0
.
0

nj,k
0
0
.
.
0
1
1
1
1
1
1
1
1

(10)

[X ]Tj ,k = [xj,k,1, xj,k,2,............, x j ,k ,n

j ,k

(11)

For sake of clarity, equation (6) is visualized in Fig. 1.


There are nj,k pieces, listed from left to right, that represent
load control groups (number of controlled devices in each
group) within each control scheme k of j-th type of device.
Listing from top to bottom of each piece is the load shifting
choices and how they are acted (on/off schedule) throughout
the time frame for all nj control schemes of j-th type device.

1
x1,1,1
x1,1,2
x1,1,3

hour
4

l1,1

x1,1 ,n1 ,1

x1,2,1
x1,2,2
x1,2,3

x1,2 ,n1 ,2

x1,n1 ,n1 ,n

Fig.1. Graphical representation of nj control schemes for j-th type device

The boxes on each piece represent control cycle of k-th


control scheme for j-th type device. It is composed of turning
off time length (number of 15-minutes lasting intervals) and
minimal turning on time length (payback period) of devices.
For example, if control cycle for k-th control scheme and jth type device is 2 hours (30-minutes lasting turning off
period and minimum 90-minutes lasting turning on period)
than lj,k=8. Control cycle for the same type device, as it can
be seen, can have different length (value) for each control
scheme, thus enabling different cycling scenarios to be
combined within a control period.
The goal of the proposed model is to obtain optimal
balance between amount of load reduction and costs that such
reduction induces, taking into account specified demands
(constraints). This is achieved by minimizing costs of load
reduction (i.e. costs of utilizing different number of customers'
appliances) (1) for different (prespecified) amounts of load
reduction (2). In this way, by varying values of Pmax in (2),
different DLC scenarios are obtained (with different amounts
of load reduction and corresponding costs). The best DLC
scenario is determined according to the buyer's economic and
financial goals (e.g. maximize profit).
Constraints (3) (one for each i-th time interval) ensure that
the load reduction will be done during prespecified period of

uncont r ol l ed
cont r ol l ed

Power [kW]

the day. Constraints (4) ensure that net restore demand (load
rebound) will not be greater than specified load reduction
Pmax. With (5) is provided that new load for each i-th time
interval is not going to be greater than the original forecasted
peak load of the observed system. For each type of controlled
device constraints, (6) and (8) ensure that, in each time
interval, sum of controlled devices for all control schemes is
not going to surpass a total number available for control.
Constraints (7) ensure, for each type of controlled device, that,
if there are such demands, number of control "cycles"
(disconnections and connections) is not going to be greater
than maximally allowed.

III. APPLICATION
The proposed model is applied to determine the potentials
for load reduction in a real power system, where water heaters
(WH) and air conditioners (A/C) are simultaneously
controlled. Daily diversified load curves of water heaters and
air conditioners are taken from [8] and shown in Fig. 2 and
Fig. 3, respectively. The way of acquiring daily diversified
load curves of controlled devices as well as effects of control
of their work (payback) are thoroughly described elsewhere
[8]-[15]. Daily load curve shape of the observed power system
is taken from [8] and is exposed in Fig. 4
Shape and values of payback for water heaters and air
conditioners are described in the Table 1 [10] and Table 2 [9],
respectively, where E stands for energy (in kWh) that devices
were deprived during turning off period, and Ppb stands for net
restore demand. Maximally allowed turning off time length
for water heaters is 3 hours [8]. Air conditioners are turned off
maximally for 30 minutes and after that they should be turned
on for 1 hour and 30 minutes [8], [9]. They can be turned off
maximally three times during control period. Also, it is
assumed that there are 300000 water heaters and 300000 air
conditioners available for control. The costs of controlling
water heaters and air conditioners are assumed to be the same.

0
6

12

15

18

Ti me[h]

21

Fig. 3. Daily diversified load curve of controlled and uncontrolled air


conditioner
TABLE I RELATIONS FOR NET RESTORE DEMAND CALCULATION OF WATER
HEATER

Time
elapsed
after
restoration
of service
0:15
0:30
0:45
1:00
1:15
1:30
1:45
2:00

Ppb (kW)
for E <3.16 kWh

-0.217 E2+ 1.375 E + 0.266


Max(0, 0.600 E - 0.100)
Max(0, 0.486 E - 0.243)
Max(0, 0.320 E - 0.160)
Max(0, 0.200 E - 0.100)
Max(0, 0.207 E - 0.166)
Max(0, 0.160 E - 0.160)
Max(0, 0.231 E - 0.554)

for E>3.16 kWh

2.442
1.798
1.295
0.852
0.533
0.489
0.346
0.177

Note: Expression Max(0,) means that for small values of E, for which
second part of expression in parenthesis becomes negative, the net restore
demand is zero i. e. payback period is finished.
TABLE II RELATIONS FOR NET RESTORE DEMAND

P o w e r [ kW ]

CALCULATION OF AIR CONDITIONERS

uncont r ol l ed
cont r ol l ed

T i me [h]
Fig. 2. Daily diversified load curve of controlled and uncontrolled water
heater

Time elapsed after restoration


of service

Ppb (kW)

0:15
0:30
0:45
1:00
1:15
1:30

0.6 E / 0.5
0.6 E / 0.5
0.3 E / 0.5
0.3 E / 0.5
0.1 E / 0.5
0.1 E / 0.5

Different amounts of load reduction in four hours period


(from 16:30 to 20:30), obtained by varying Pmax in (2), and
corresponding numbers of water heaters and air conditioners
that have to be controlled in order to achieve those reductions
are shown in Table 3. The buyers of electricity, according to
their economic and financial goals, will select the amount of
load reduction (and corresponding DLC scenario) to be
offered in the electricity market.

The effects of DLC, in the case of controlling 300000 air


conditioners and water heaters in four hours period (from
16:30 to 20:30), are shown in Fig. 4.
TABLE III AMOUNTS OF LOAD REDUCTION AND NUMBERS OF
CONTROLLED DEVICES

Amount of load reduction

[2]
[3]
[4]

Number of controlled devices

P =100 MW

114 000 A/C

P =150 MW

193 000 A/C

[5]

300 000 A/C


34 000 WH
300 000 A/C
300 000 WH

P =200 MW
P =250 MW

[6]
[7]

8500000

[8]
before DLC
after DLC

7500000

[9]

Load [kW]

6500000

[10]

5500000

[11]

4500000

[12]
[13]

3500000

[14]
2500000
6

12

15

18

21

Time [h]

Fig. 4. Load reduction in the case of controlling 300000 water heaters and
300000 air conditioners.

IV. CONCLUSIONS
In this paper is proposed a linear programming based
procedure for designing DLC of different types of customer's
appliances as a market based program. The goal of the
proposed procedure is to determine different DLC scenarios
that ensure certain (prespecified) amounts of load reduction in
the given period of the day. In this way, buyers of electricity,
according to their economic and financial goals, can select the
optimal amount of load reduction to be offered in the
electricity market. The obtained results have shown that
suggested procedure is a powerful decision-making tool for
improving design of DLC in competitive market environment.
V. REFERENCES
[1]

C. D. Vourunas, "Interruptible Load as a Competitor to Local


Generation for Preserving Voltage Security", presented at IEEE PES
2001 Winter Meeting, Columbus Ohio, USA, 2001.

[15]

J. H. Doudna, "Overview of California ISO Summer 2000 Demand


Response Programs", presented at IEEE PES 2001 Winter Meeting,
Columbus Ohio, USA, 2001.
J. H. Kehler, "Procuring Load Curtailment for Grid Security in Alberta",
presented at IEEE PES 2001 Winter Meeting, Columbus Ohio, USA,
2001.
J. Eto, C. Maranay, C Goldman, J. Kueck, B. Kirby, J. Dagle, F.
Alvarado, T. Mount, S. Oren and C. Martinez, "An R&D Agenda to
Enhance Electricity System Reliability by Increasing Customer
Participation in Emerging Competitive Markets", presented at IEEE PES
2001 Winter Meeting, Columbus Ohio, USA, 2001.
S. Talukdar and C. W. Gellings, Load Management, The Institute of
Electrical and Electronics Engineers, Inc., New York, 1987, pp. 1-40.
IEEE Load Management Working Group, "Economic Issues Related to
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D. R. Limaye, "Implementation of Demand Side Management
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October 1985.
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Control of Residential Loads on the Design and Operation of the
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H. Salehfar and A. D. Patton, "A Production Costing Methodology
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VI. BIOGRAPHIES
Zeljko N. Popovic (1963) received his B.Sc. degree from University of
Novi Sad, in 1988, and M.Sc. degree from University of Belgrade, in 1999,
both in electrical engineering. He is a distribution engineer in
Elektrovojvodina, Power Distribution Company in Novi Sad, Yugoslavia. He
has been employed in Elektrovojvodina since 1992, working on load
management and distribution network planning and development. Currently
he is working towards the Ph.D. in field of distribution network operation and
planning.

Dragan S.Popovic (1959) received his B.Sc. degree from the University
of Novi Sad, Yugoslavia, in 1985, and the M.Sc. and Ph.D. degrees from the
University of Belgrade, Yugoslavia, in 1990 and 1995. He is currently
engaged as professor in Faculty of Engineering, University of Novi Sad. He
has worked for a long time in researching fields of bulk power system
analysis, control and stability. Presently he is engaged in researching and
developing application software for distribution management systems. He has
also been the project manager on several projects in the field of distribution
automation and distribution management system.