Capacity Valuation of Demand Response in the Presence of Variable Generation through Monte Carlo Analysis

While smart demand-side management technologies have significant potential to support the integration of variable renewable generation sources in the electricity system, rigorously quantifying the contribution of demand response to meeting peak demand remains a challenge due to the nontrivial intertemporal considerations involved in demand response operations. This paper contributes to the field of capacity value by studying the effect of customer participation in DR programs, investigating the contribution that shiftable loads can provide for capacity value in a smart, standalone system. This paper uses a Monte Carlo simulation to investigate the effect of DR on the loss of load probability in a sequential simulation framework. Also presented here is a load-shifting model for customer loads where time of use is based on need, priority, and the availability of generation. Results of this work present a quantitative value for the equivalent firm capacity of demand response programs for a specific test case that depends on the participation rate among consumers.