Data-driven Nonlinear Prediction Model for Price Signals in Demand Response Programs

In power systems, electrical consumers can become a significant source of flexibility, by adjusting their consumption according to grid’s needs while respecting their operational constraints. Consumers’ flexibility potential can be exploited through the submission of dynamic electricity prices. Such prices are able to describe the variable condition of the power system and are broadcast to the consumers in order to obtain a certain change in consumption. The formulation of effective dynamic prices requires the development of proper models that describe the price responsiveness of electrical consumers. In this paper, we propose a nonlinear prediction model for the dynamic electricity prices in demand response (DR) programs. Specifically, the nonlinear autoregressive with exogenous input (NARX) model structure is used to learn from available data to predict appropriate electricity price signals. For the validation of the model (in an aggregate manner) in predicting consumers’ price-response, the data from 10 Danish households is utilised, which has provided by the Danish Transmission Service Operator (TSO) Energinet.