A system dynamics investigation on the long-term impacts of demand response in generation investment planning incorporating renewables

By exchanging demand and price data between demand and supply sides, demand response (DR) exerts a substantial impact on the power system planning. This study proposes a novel dynamic model for long-term generation capacity investment planning with DR implementation. The relation between price and responsive loads is modeled regarding a two-way market-based relevance. Renewable energy resources alongside common thermal technologies are considered in the proposed investment process. Further, uncertainty of power generation in the thermal units, renewables' availability, and participation in the DR programs are modeled. Different levels of DR, penetration of renewables, and capacity payment are investigated to obtain the most advantageous supply by simulating several cases. Special attention is drawn to quantifying the results of DR implementation in long-term planning. The results identify that, from an environmental point of view, DR can contribute to enhancing renewables penetration and diminishing CO2 emissions. From the economic viewpoint, by postponement or preventing the new power plants construction and mitigating price spikes, DR causes more economic power system. Furthermore, from the reliability perspective, with the participation of responsive consumers, DR improves the power system's reliability and security. The proposed model allows the regulatory body to analyze the economical, technical, and environmental effects of DR in the long-term. [Display omitted] •Quantifying long-term impact of increasing renewables penetration considering DR.•Evaluating the reliability and environmental aspects of planning incorporating DR.•Proposing a new approach for evaluating long-term impacts of demand response (DR).•Modeling the uncertainty of generation availability & responsive load participation.•Developing new market-based mutual relevance between price and elastic loads.