Demand-side behavior in the smart grid environment

Abstract

Recent developments in traditional power systems which involve emerging smart technologies and widely employing of communication will convert the present electricity grids into the smart grids. The future smart and efficient power systems will treat completely different compare with the existing power systems. This paper discusses the effect of emerging smart grids on the consumer's behavior. It investigates the responses of different types of consumers to the spot electricity price and the price elasticity of demand in the smart grid environment. Smart technologies could bring all of the consumers with any level of demand to the market actively, and results in increasing the efficiency of the market in a fully competitive electricity market. This paper also describes the effect of Demand Response (DR) on some electricity market issues like short-term load and price forecasting, generation expansion, and imperfect competition, in the smart grid environment. The qualitative discussions show that by emerging the smart grids the market efficiency, costumer's benefits, and Demand Response of the power system are improved and the ability of strategic players to exert market power will be reduced.