Opportunities and challenges of demand response in active distribution networks

In power systems, the installed generation capacity must exceed the annual peak demand, even though some capacity is kept idle most of the time. However, if it is uneconomical or not feasible to augment a sufficient capacity, the demand might exceed the available capacity. This mandates the system operator to shed the load in order to maintain security of the system. With the advent of advanced smart metering infrastructure, communication between system operator and end‐use customers makes it possible to adjust/curtail/shift the demand with respect to the state of the system. The response of the demand commonly termed as demand response (DR) can be attained either by incentive‐based or price‐based. With the help of DR, the renewable energy generation capacity can be increased by tuning the demand to match the variable and unpredictable power from renewable generation. It can also bring other benefits such as peak shaving, hosting capacity enhancement, and generation cost reduction. Furthermore, electric vehicles, heat pumps, and electric water heater can also be used as distributed storage resources to contribute to ancillary services, such as frequency/voltage regulation, peak‐shaving power or help to integrate fluctuating renewable resources. All these DR modes of operation need conventional regulatory frameworks and market design for capitalizing the available resources. Therefore, the objective of the study is to discuss the DR classification and their control strategies, DR role in microgrids and integration of renewable energy resources. Also, highlighted the opportunities and challenges along with the insights for the research scope associated with DR. WIREs Energy Environ 2018, 7:e271. doi: 10.1002/wene.271 This article is categorized under: Energy Infrastructure > Systems and Infrastructure Energy Systems Economics > Systems and Infrastructure Energy Policy and Planning > Systems and Infrastructure Demand response ‐Plays with flexible loads and renewable energy sources..