Impact of Incentive Mechanism on Demand Response Programs in Smart Microgrids with Electric Vehicles

Abstract

The demand response (DR) potential of plug-in electric vehicles can be tapped by designing appropriate DR strategy and incentive mechanisms. In this paper, a new incentive mechanism called priority rewarding is proposed to fairly cater incentives to end-users based on the type of load and their active participation in DR programs. Also as a DR Strategy, bilateral contracts between end-users participating in DR and the owners of distributed generators is obtained using second price auction mechanism. In order to prove the suitability of the proposed incentive mechanism with the DR strategy to microgrid scenario, an agent based energy trading scenario is developed using Java Agent Development Environment. The developed agent system is applied to a case study system with a grid connected microgrid and the obtained results have suggested the successful adoption of the proposed methodology.