Risk-based performance of regional-market management considering information gap decision theory and demand response program

In the current study, the optimal performance of regional market management (RMM) is presented in one specific area of the market in order to determine the optimal demand aiming to minimize the costs of smoothing the load curve, and to implement the demand response program (DRP). In addition, the attempt has been made in this study to minimize the involuntary lost energy in terms of the initial price uncertainty and the technical constraints including the price fluctuation limits, demand ceilings and the relative risk limits. Furthermore, a market-based tensile model is presented in the form of a combination of the formulations of over lapping generations (OLG) and price elasticity (PEM) for determining demand levels in DRP. The information-gap decision theory (IGDT) is presented to model the initial price uncertainty in the above issue, according to different rates of time preference as well as the algorithm of the co-evolutionary particle swarm optimization (C-PSO). IGDT risk-aversion and risk-taking strategies help RMM to select the best strategy with the desired risk level for controlling the price uncertainty, improving the load curve, enhancing the reliability and reducing the costs.