Distribution LMP-Based Demand Management in Industrial Park via a Bi-Level Programming Approach

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Abstract
To enhance industrial park's economic gains and effectively allocate its electricity bill among industrial users with combined heat and power (CHP) units and photovoltaic (PV) panels, this paper proposes a distribution locational marginal price (DLMP)-based bi-level demand management approach. The upper level optimizes dispatching decisions of industrial users with the objective of minimizing their energy bills, and the lower level is a DLMP-based market clearing problem to minimize the two-part tariff cost of the industrial park operator. In order to solve the proposed bi-level model efficiently, it is first equivalently converted into a single-level mathematical programming with equilibrium constraints (MPEC), and then reformulated as a mixed-integer second-order conic programming (MISOCP) model by linearizing bilinear terms. Numerical results demonstrate the effectiveness of our proposed bi-level method in lowering industrial park's electricity bill and achieving effective allocation among users.
Funding Information
  • National Key R&D Program of China (2018YFB0905000)
  • Science and Technology Project of SGCC (SGTJDK00DWJS1800232)

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