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Energies 2017, 10(7), 879; https://doi.org/10.3390/en10070879

Demand Response Resource Allocation Method Using Mean-Variance Portfolio Theory for Load Aggregators in the Korean Demand Response Market

School of Electrical Engineering, Korea University, Seoul 02841, Korea
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Received: 2 May 2017 / Revised: 20 June 2017 / Accepted: 24 June 2017 / Published: 29 June 2017
(This article belongs to the Section Electrical Power and Energy System)
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Abstract

Since the demand response (DR) market was introduced in Korea, load aggregators have also been allowed to participate in the electricity market. However, a risk-management-based method for the efficient operation of demand response resources (DRRs) has not been studied from the load aggregators’ perspective. In this paper, a systematic DRR allocation method is proposed for load aggregators to operate DRRs using mean-variance portfolio theory. The proposed method is designed to determine the lowest-risk DRR portfolio for a given level of expected return using mean-variance portfolio theory from the perspective of load aggregators. The numerical results show that the proposed method can be used to reduce the risk compared to that obtained by the baseline method, in which all individual DRRs are allocated in a DRR group by maximum curtailment capability. View Full-Text
Keywords: demand response resource; mean-variance portfolio theory; expected return and risk; load aggregators demand response resource; mean-variance portfolio theory; expected return and risk; load aggregators
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Chae, J.; Joo, S.-K. Demand Response Resource Allocation Method Using Mean-Variance Portfolio Theory for Load Aggregators in the Korean Demand Response Market. Energies 2017, 10, 879.

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