Price-based low-carbon demand response considering the conduction of carbon emission costs in smart grids

The rapid development of the Industrial Internet-of-Things extends demand response (DR) research to the aspect of low-carbon emission in smart grids. This study proposed the concept of low-carbon DR (LCDR) in the electricity market as well as the price-based LCDR mechanism and its model. First, carbon cost conduction from the generation side to the demand side was analyzed, and then conduction function was quantifiably deduced. Second, the mechanism and model of price-based LCDR were proposed by considering three DR signals, namely, the electricity price, carbon price, and carbon emission intensity of the demand side, based on the traditional price-based DR (PBDR) mechanism. Third, the proposed LCDR mechanism was applied to the environmental–economic dispatch optimization problem. At last, case studies on the modified IEEE 39-bus system verified that the LCDR mechanism can reduce carbon emissions while maintaining the function of the traditional PBDR. Meanwhile, the applicability of LCDR was illustrated based on carbon emission sensitivity to LCDR model parameters. The proposed mechanism can guide participants in the electricity market in reducing electricity carbon emissions.