IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v11y2018i12p3417-d188412.html
   My bibliography  Save this article

A Two-Step Methodology for Free Rider Mitigation with an Improved Settlement Algorithm: Regression in CBL Estimation and New Incentive Payment Rule in Residential Demand Response

Author

Listed:
  • Eunjung Lee

    (School of Integrated Technology, Gwangju Institute of Science and Technology, 123 Cheomdangwagi-ro, Buk-gu, Gwangju 61005, Korea)

  • Dongsik Jang

    (Korea Electric Power Research Institute, 105 Munji-ro, Yuseong-gu, Daejeon 34056, Korea)

  • Jinho Kim

    (School of Integrated Technology, Gwangju Institute of Science and Technology, 123 Cheomdangwagi-ro, Buk-gu, Gwangju 61005, Korea)

Abstract

Recent demand response (DR) research efforts have focused on reducing the peak demand, and thereby electricity prices. Load reductions from DR programs can be viewed as equivalent electricity generation by conventional means. Thus, utility companies must pay incentives to customers who reduce their demand accordingly. However, many key variables intrinsic to residential customers are significantly more complicated compared to those of commercial and industrial customers. Thus, residential DR programs are economically difficult to operate, especially because excess incentive settlements can result in free riders, who get incentives without reducing their loads. Improving baseline estimation accuracy is insufficient to solve this problem. To alleviate the free rider problem, we proposed an improved two-step method—estimating the baseline load using regression and implementing a minimum-threshold payment rule. We applied the proposed method to data from residential customers participating in a peak-time rebate program in Korea. It initially suffered from numerous free riders caused by inaccurate baseline estimation. The proposed method mitigated the issue by reducing the number of free riders. The results indicate the possibility of lowering the existing incentive payment. The findings indicate that it is possible to run more stable residential DR programs by mitigating the uncertainty associated with customer electricity consumption.

Suggested Citation

  • Eunjung Lee & Dongsik Jang & Jinho Kim, 2018. "A Two-Step Methodology for Free Rider Mitigation with an Improved Settlement Algorithm: Regression in CBL Estimation and New Incentive Payment Rule in Residential Demand Response," Energies, MDPI, vol. 11(12), pages 1-17, December.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:12:p:3417-:d:188412
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/11/12/3417/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/11/12/3417/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Saehong Park & Seunghyoung Ryu & Yohwan Choi & Jihyo Kim & Hongseok Kim, 2015. "Data-Driven Baseline Estimation of Residential Buildings for Demand Response," Energies, MDPI, vol. 8(9), pages 1-21, September.
    2. J W Taylor, 2003. "Short-term electricity demand forecasting using double seasonal exponential smoothing," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(8), pages 799-805, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eunjung Lee & Jinho Kim & Dongsik Jang, 2020. "Load Profile Segmentation for Effective Residential Demand Response Program: Method and Evidence from Korean Pilot Study," Energies, MDPI, vol. 13(6), pages 1-18, March.
    2. Alain Aoun & Hussein Ibrahim & Mazen Ghandour & Adrian Ilinca, 2021. "Blockchain-Enabled Energy Demand Side Management Cap and Trade Model," Energies, MDPI, vol. 14(24), pages 1-26, December.
    3. Gabaldón, A. & García-Garre, A. & Ruiz-Abellón, M.C. & Guillamón, A. & Álvarez-Bel, C. & Fernandez-Jimenez, L.A., 2021. "Improvement of customer baselines for the evaluation of demand response through the use of physically-based load models," Utilities Policy, Elsevier, vol. 70(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seunghyoung Ryu & Jaekoo Noh & Hongseok Kim, 2016. "Deep Neural Network Based Demand Side Short Term Load Forecasting," Energies, MDPI, vol. 10(1), pages 1-20, December.
    2. Pavel V. Matrenin & Vadim Z. Manusov & Alexandra I. Khalyasmaa & Dmitry V. Antonenkov & Stanislav A. Eroshenko & Denis N. Butusov, 2020. "Improving Accuracy and Generalization Performance of Small-Size Recurrent Neural Networks Applied to Short-Term Load Forecasting," Mathematics, MDPI, vol. 8(12), pages 1-17, December.
    3. Smyl, Slawek, 2020. "A hybrid method of exponential smoothing and recurrent neural networks for time series forecasting," International Journal of Forecasting, Elsevier, vol. 36(1), pages 75-85.
    4. Barrow, Devon & Kourentzes, Nikolaos, 2018. "The impact of special days in call arrivals forecasting: A neural network approach to modelling special days," European Journal of Operational Research, Elsevier, vol. 264(3), pages 967-977.
    5. Hu, Junjie & López Cabrera, Brenda & Melzer, Awdesch, 2021. "Advanced statistical learning on short term load process forecasting," IRTG 1792 Discussion Papers 2021-020, Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series".
    6. Reham Alhindawi & Yousef Abu Nahleh & Arun Kumar & Nirajan Shiwakoti, 2020. "Projection of Greenhouse Gas Emissions for the Road Transport Sector Based on Multivariate Regression and the Double Exponential Smoothing Model," Sustainability, MDPI, vol. 12(21), pages 1-18, November.
    7. Doumen, Sjoerd C. & Nguyen, Phuong & Kok, Koen, 2022. "Challenges for large-scale Local Electricity Market implementation reviewed from the stakeholder perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    8. Goodarzi, Shadi & Perera, H. Niles & Bunn, Derek, 2019. "The impact of renewable energy forecast errors on imbalance volumes and electricity spot prices," Energy Policy, Elsevier, vol. 134(C).
    9. Alysha M De Livera, 2010. "Automatic forecasting with a modified exponential smoothing state space framework," Monash Econometrics and Business Statistics Working Papers 10/10, Monash University, Department of Econometrics and Business Statistics.
    10. Yildiz, B. & Bilbao, J.I. & Sproul, A.B., 2017. "A review and analysis of regression and machine learning models on commercial building electricity load forecasting," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 1104-1122.
    11. Barrow, Devon K., 2016. "Forecasting intraday call arrivals using the seasonal moving average method," Journal of Business Research, Elsevier, vol. 69(12), pages 6088-6096.
    12. Lifang Xiao & Xiangyang Chen & Hao Wang, 2021. "Calculation and realization of new method grey residual error correction model," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-13, July.
    13. Aviral Kumar Tiwari & Claudiu T Albulescu & Phouphet Kyophilavong, 2014. "A comparison of different forecasting models of the international trade in India," Economics Bulletin, AccessEcon, vol. 34(1), pages 420-429.
    14. Miloš Božić & Miloš Stojanović & Zoran Stajić & Dragan Tasić, 2013. "A New Two-Stage Approach to Short Term Electrical Load Forecasting," Energies, MDPI, vol. 6(4), pages 1-19, April.
    15. Salah Bouktif & Ali Fiaz & Ali Ouni & Mohamed Adel Serhani, 2018. "Optimal Deep Learning LSTM Model for Electric Load Forecasting using Feature Selection and Genetic Algorithm: Comparison with Machine Learning Approaches †," Energies, MDPI, vol. 11(7), pages 1-20, June.
    16. Rendon-Sanchez, Juan F. & de Menezes, Lilian M., 2019. "Structural combination of seasonal exponential smoothing forecasts applied to load forecasting," European Journal of Operational Research, Elsevier, vol. 275(3), pages 916-924.
    17. James W. Taylor, 2012. "Density Forecasting of Intraday Call Center Arrivals Using Models Based on Exponential Smoothing," Management Science, INFORMS, vol. 58(3), pages 534-549, March.
    18. Cancelo, José Ramón & Espasa, Antoni & Grafe, Rosmarie, 2008. "Forecasting the electricity load from one day to one week ahead for the Spanish system operator," International Journal of Forecasting, Elsevier, vol. 24(4), pages 588-602.
    19. Winita Sulandari & Yudho Yudhanto & Sri Subanti & Crisma Devika Setiawan & Riskhia Hapsari & Paulo Canas Rodrigues, 2023. "Comparing the Simple to Complex Automatic Methods with the Ensemble Approach in Forecasting Electrical Time Series Data," Energies, MDPI, vol. 16(22), pages 1-16, November.
    20. Pesantez, Jorge E. & Li, Binbin & Lee, Christopher & Zhao, Zhizhen & Butala, Mark & Stillwell, Ashlynn S., 2023. "A Comparison Study of Predictive Models for Electricity Demand in a Diverse Urban Environment," Energy, Elsevier, vol. 283(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:11:y:2018:i:12:p:3417-:d:188412. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.