Incorporating fairness within demand response programs in smart grid

Basic Demand response (DR) programs aim to modulate the demand of electricity in accordance with its supply. The existing DR programs have only been of limited success, though the participation has steadily increased in the recent past. This paper establishes the lack of fairness principles within the DR programs, as perceived by the customers to be one of the key deterrents. Fair DR (FDR) scheme criteria are defined and compared with existing pricing schemes. In this context, a simplified pricing model that takes into consideration fairness criteria for residential category is also proposed in this paper. The proposed pricing model is simulated in Gridlab-D and the results are compared with that of the flat and the price based pricing schemes. Initial results establish that our pricing scheme is fair, it flattens the demand curve over a day and provides a win-win situation for both - the customer and the utility company.