Two Market Models for Demand Response in Power Networks

In this paper, the authors consider two abstract market models for designing demand response to match power supply and shape power demand, respectively. They characterize the resulting equilibria in competitive as well as oligopolistic markets, and propose distributed demand response algorithms to achieve the equilibria. The models serve as a starting point to include the appliance-level details and constraints for designing practical demand response schemes for smart power grids. The usual practice in power networks is to match supply to demand. This is challenging because demand is highly time-varying.