Co-Optimization of Energy and Reserve in Power Markets With Demand Side Participation in Reserve Services

This paper proposes and analyzes a model of power market with co-optimization of energy and reserve provided by both the supply and the demand side. In this model, generators and consumers submit their offers and bids on two distinct products including energy and reserve. The extra flexibility in scheduling introduced by demand-side reserve ofers can lead to significant gains in economic efficiency of the system. The obtained results from optimization with both mixed integer linear programming and genetic algorithm methods, presents significant gains from change of demand side reserve price on parameters like energy market prices, socialn welfare and unit commitment. Studies also present that consumers in addition to increase their prrofits by presenting in the market, they also reduce the market power of generators. With reduction of demand level that accessible thorough various demand response programs, will reduce aforesaid significant gains.