Market-based Impact of a Demand Response Program in the Colombian Power Market

Abstract

This paper presents an economic-based impact analysis of a demand response program (DR) in the Colombian power market. Specifically, we consider the impact of a direct load control DR program on the cost of both restrictions and power pool transactions. To do so, economic dispatches with and without DR were implemented to estimate the potential effect on real generation, ideal generation and spot prices. The economic dispatch model was strictly implemented following the Colombian regulation. This allowed us to estimate, on an hourly basis, the cost of restrictions cost and cost transactions in the power pool. We apply reductions of 5, 7, and 10% of peak demand of industrial and residential customers. Results of DR impacts were compared with realistic costs observed in the market corresponding to a sample of seven representative days of the year. It was observed that daily economic benefit of this DR program could range between 44 and 381 million of $COP, and this can represent savings for users up to 0,4 $COP/kWh.