Dynamic Demand Response Solution for Industrial Customers
Salman Mohagheghi
Member, IEEE
Colorado School of Mines
Department of Electrical Engineering and Computer Science
1610 Illinois St. Golden, CO 80401, USA
smohaghe@mines.edu
Abstract -- Electric demand side management (DSM) focuses
on changing the electricity consumption patterns of end-use
customers through improving energy efficiency and optimizing
allocation of power. Demand response (DR) is a DSM solution
that targets residential, commercial and industrial customers,
and is developed for demand reduction or demand shifting at a
specific time for a specific duration. In the absence of on-site
generation or possibility of demand shifting, consumption level
needs to be lowered. Whereas non-criticality of loads at the
residential and commercial levels allows for demand reduction
with relative ease, reducing the demand of industrial processes
requires a more sophisticated solution. Production constraints,
inventory constraints, maintenance schedules and crew
management are some of the many factors that have to be taken
into account before one or more processes can be temporarily
shut down. Some of these constraints can be viewed along the
overall performance of the system, while others need to be
analyzed and evaluated in real-time. A system is proposed in this
paper that dynamically ranks loads and workstations within an
industrial site as candidates for demand reduction. Constraints
on the daily operation of the industrial system are taken into
account in conjunction with real-time assessment of inventory
buildup. A fuzzy/expert-based system combined with an
optimization module verifies whether and, if applicable, by how
much the plant can participate in a utility-initiated DR event,
while satisfying its local operational constraints. A case study is
proposed for a sample production line to further explain the
design concepts.
Index Terms—Demand side management, demand response,
energy management, industrial automation system, inventory
management.
I. INTRODUCTION
Electric demand response (DR) is becoming one of the
main pillars of the Smart Grid paradigm. It refers to the
changes in the electricity usage by the end-use customers
from their nominal consumption patterns. These changes in
consumption are often in response to changes in the price of
electricity over time, or to incentive payments that are
designed to induce lower electricity use at times of high
wholesale market prices or when the system reliability is
jeopardized [1]. In addition to improving the reliability of the
power system, and making short-term impacts on the
electricity markets, DR can make considerable environmental
impacts by reducing the system peak load in the long-term
and therefore postponing the need for building new power
plants and other related capacity expansion projects. DR can
Neda Raji
Contronic LLC
Centennial, CO 80112, USA
neda@contronicllc.com
provide efficient system capacity relief at a lower cost
compared to many peaking power plants, while the service
can be offered at a faster rate [2]. Successful deployment of a
DR program can lead to substantial financial returns [3],
benefiting both the utility and the customers.
Demand response programs can be roughly classified into
three groups according to the type of action required and the
party initiating the action. These are incentive-based DR, rate-
based DR and DR bids [4]. The first category is the main
topic of this paper. Here, a set of demand reduction signals
are issued by the utility or the DR Service Provider
(aggregator), and transmitted to the participating customers in
the form of voluntary demand reduction requests or
mandatory commands. Various types of resources can be
utilized under this program such as directly controllable loads
that may be directly dispatched by the utility based on the
balance between the load and generation [5], e.g., Direct
Load Control (DLC), and loads that can be interrupted or
reduced upon receipt of a signal from the utility, e.g.,
Interruptible and Curtailable Load (I&C). DLC loads can be
remotely cycled or turned off by the utility, and can normally
be deployed within a relatively short period of time, whereas
I&C loads require an advance notification time that may vary
from a few minutes to a few hours [6]. While typical
residential loads may fit well in the DLC program, I&C
scheme is more suitable for larger scale commercial and
industrial customers.
Much focus on DR has been on residential and commercial
customers. Here, demand reduction could lead to
inconvenience experienced by the end-users; however, the
decision making –comply or opt-out– is relatively non-critical
since the types of loads to be interrupted are often lighting
loads, or heating, cooling and air-conditioning (HVAC) [7]. A
DR module will check the characteristics of the DR event
(time, duration, and amount) and by examining local policies
and history of past events makes a decision accordingly [8],
[9]. While this class of customers is easier to manage by the
utility, it does not reflect the whole energy resource that can
be potentially made available for DR event. In fact, the
consumption level of the industrial sector is often the bigger
portion of the total load served by the utilities. In many cases,
the industrial customers (2-10% of total customers) may
account for up to 80% of the electricity usage [10]. This
further emphasizes the importance of the role of the industrial
sector in DR. Nevertheless, implementation of DR for the
industrial customers requires a different approach. For these
customers, inconvenience would not be the only outcome of
DR. Instead, interruption of service may lead to interruption
of production and/or violating the daily operational and
production constraints of the plant.
In general, an industrial customer may reduce its
consumption through using on-site generation, energy storage,
shifting the demand to a different time, curtailment of
noncritical loads such as lighting, or through temporary shut-
down of one or more processes (a more detailed discussion
along with the review of the state of the art are provided in
section II of the paper). The last approach could potentially
lead to a considerable reduction in demand; however, it poses
some unique challenges. Depending on the criticality of the
processes shut down, the number of workstations available,
the required throughput, the maintenance schedule, the crew
constraints and inventory restrictions, shutting down a process
may create long-term impacts on the overall process line,
hence making DR non-justifiable economically. In fact,
among other things, the plant operator would need to
investigate the effect of shutting down a workstation on
meeting the customers’ demand with the given runtime [11],
the capital value of the resulting inventory buildup [12], and
the workstation interrelations (series stations, several
workstations feeding into a common workstation, etc) [13].
In an earlier paper [14], the authors proposed an intelligent
system that, using the concepts of fuzzy systems and graph
theoretic approaches, identified whether loads/workstations
existed within the plant whose demand could potentially be
curtailed. In order to achieve this, the system would
investigate the various operational constraints of the industrial
process as well as the interrelations of the workstations with
one another. In the approach proposed in [14], inventory
(both pre-process and post-process) was viewed as a binary
variable. In other words, only existence of inventory was
considered in the analysis, and not its amount. Also, the level
of energy consumed by each workstation was not included in
the analysis. This paper extends the work in [14] by looking
into these additional variables and constraints, namely, the
dynamic variations of different post-process inventories, the
overall demand of the plant, and the energy consumption
level of different workstations. This would present a dynamic
DR solution (compared to the quasi-dynamic approach
proposed in [14]). The additions to this modified approach
are essential for integrating the proposed solution into a larger
factory automation framework.
The rest of the paper is organized as follows. Section II
summarizes some considerations and constraints for the
industrial plant operation as it relates to demand response.
The description of the proposed system along with the design
procedure is presented in section III. Section IV presents the
results of the case study on a typical industrial plant. Finally,
concluding remarks appear in section V of the paper.
II. DEMAND RESPONSE FOR INDUSTRIAL PLANTS
Due to the dynamics of general loads, it takes a certain
amount of time (ramp period) until the consumer demand is
reduced to the requested levels [15]. Upon receiving the
demand reduction signal from the utility, many industrial
plants can switch to backup generation units. These may
include gas-fired or diesel-fired generators or small scale
wind turbines. In the extreme cases if deployed as spinning
reserves, many of these units have a time response of a few
seconds to about 5 minutes [16], [17]. Regardless of the time
it takes for the unit to come online, once they start generating
power, the overall demand of the industrial plant –from the
utility’s standpoint– will be reduced.
On the other hand, introduction of energy storage systems
for power grid applications adds to the flexibility of the
industrial plant operator, as it will now be possible to store
the energy available from non-dispatchable resources of
energy such as wind and solar, and use it at a later time when
the DR event is initiated.
If on-site generation or energy storage are not available,
demand shifting may be used as another viable option.
Maintenance scheduling, crew constraints and other
operational requirements of the plant can be analyzed to see if
it is feasible for the production to be shifted to a later time,
e.g., when the electricity rates are low or when the DR event
terminates. Some examples of demand shifting have been
reported in [18], [19].
Finally, demand reduction/curtailment could be considered
as an alternative. In fact, efforts have been made in the
literature to develop intelligent schemes for load shedding in
an industrial plant [18], [20]-[22]. Much of the focus in load
shedding is to maintain the security and stability of the
isolated industrial system –following a disturbance in the
grid– when using backup generation. Methods have been used
based on priority ranking of the loads [18], expert systems
[20], [21], and neural networks [22]. Also, solutions have
been proposed for energy efficiency and demand conservation
through DSM techniques [18], [23].
However, efficient demand reduction for a DR event
requires a more detailed analysis and thorough evaluation of
the industrial process. Through analyzing the operational
constraints of the plant, processes can be prioritized as
candidates for being shut down or for operating at reduced
capacity. The revenue losses incurred by the plant must be
compared with the direct gains, i.e., incentive payments
and/or discounted rates, as well as indirect gains, e.g.,
concurrence of the process shut-down with an upcoming
maintenance scheduling or crew bottleneck. This can be
either used as a standalone DR tool, or in conjunction with
other means such as demand shifting and on-site generation.
This feature is the main focus of this paper.
 III. DYNAMIC DEMAND RESPONSE SCHEME
The system proposed in this paper is created and expanded
based on the original design presented in [14]. The objective
here is to determine the statuses of the workstations (fully
operating, partially operating, or shut-down) in such a way
that the industrial plant is able to participate in a DR event
while satisfying all real-time operational constraints. Figure 1
illustrates the structure of the proposed solution. In short:
• Offline Ranking Analysis (ORA) module ranks the
workstations based on their priorities for demand
curtailment during a DR event. The module uses offline
information (as explained below) to achieve this goal.
• Real-Time Ranking Modification (RTRM) modifies the
rankings received by the ORA based on the daily
operational constraints such as maintenance and crew.
• Integer Programming (IP) module then receives the
modified rankings from the RTRM, the workstation
connections from the ORA, as well as the inventory
constraints; and in return, determines the optimal schedule
of operation for the workstations (refer to section III.C for
details).
Fig. 1. Proposed system for dynamic demand response.
A. Offline Ranking Analysis Module
ORA module is designed to prioritize the existing
workstations as candidates for demand reduction. The module
performs the ranking based on the information received on
the offline classification of the workstations, critical
performance requirements, and process interrelations. This
information is associated with the long-term performance of
the plant, and will often not be modified in real-time. For a
detailed description of the ORA and the functions of different
sub-modules, the reader is referred to [14]; nevertheless,
some overall aspects are briefly described below.
In this paper, a fuzzy cognitive map (FCM) based design
[24] is used for implementing the ORA (Fig. 2). The
workstations are defined as the nodes (vertices) of the FCM,
while the links (edges) denote the interrelations between the
workstations. Within this framework, the impact of a
workstation is defined as the total effect of the workstation
node on the end product node. The ranking of the
workstation, i.e., priority for demand reduction, is defined as
the logical inverse of the impact.
Without the loss of generality, the weights of the FCM
links have been assigned fuzzy terms low, medium and high,
which are determined based on how critical the corresponding
node would be. For instance, if node A represents a critical
workstation, the weights wjA (j: rest of the nodes) of all the
links leaving A will be denoted high. This is due to the fact
that the impact A has on the final product of the plant would
be considered high. This scheme would ensure that the
workstations that are classified as non-critical and time-
flexible would become natural candidates for receiving higher
priority of demand reduction, whereas being critical or
needing a long startup time can be grounds for assigning
lower priorities to the workstation's demand to be curtailed.
The rules in Table I are used for identifying critical and non-
critical workstations.
Fig. 2. FCM-based modeling of the interrelations of workstations.
TABLE I
WORKSTATION CLASSIFICATION
Criticality
Examples
Classification
Workstations that highly affect the completion of the
Critical (high) end product; workstations that process the product of
multiple other workstations
Workstations with a large number of crew;
Semi-critical
workstations with a long set up time; workstations that
(medium)
carry high value inventory
Noncritical Workstations not included in above categories; those
(low) with flexible schedules, and/or low number of crew
B. Real-Time Ranking Modification Module TABLE III
RULE BASE FOR REAL-TIME RANKING MODIFICATION
RTRM module updates the rankings determined at ORA Priority Derived from
Time to Maintenance Crew Constraint
based on the information on maintenance scheduling and crew RTPM
management. This module is expected to receive updated High Low
information on a regular basis; therefore, it can reflect the Long Medium Low
latest operational requirements of the plant. Low Medium
High Low
1) Maintenance Scheduling
Medium Medium Low
This sub-module looks into the scheduled maintenances
Low Medium
coming up for different workstations. Clearly, stations that are High Low
scheduled for maintenance soon enough would normally Short Medium Medium
move higher in the priority list to be interrupted. This way, Low High
the demand reduction target may be met while the workstation
undergoes its scheduled maintenance. For this purpose, a 4) Ranking Adjustment
fuzzy variable time to maintenance is defined on the basis of The output of RTRM (i.e., priority based on real-time
the time remaining to DR event: operation) will be combined with that of the ORA (i.e.,
Time to Scheduled Maintenance priority based on long-term operation) in order to achieve an
Tm = (1)
Time to DR Event overall DR priority index for the loads/workstations. This
Without the loss of generality, fuzzy terms short, medium data would then be used by the optimization module to assign
and long are defined for Tm (see [14] for details). weights to different workstations (see section III.C). A simple
2) Crew Schedule rule base is used for this purpose as shown in Table IV.
This sub-module investigates whether the crew scheduled
to work on a specific workstation can be assigned to work on TABLE IV
COMBINED PRIORITIES BASED ON ORA AND RTRM OUTPUTS
a different workstation for the duration of demand reduction. Priority Derived from Priority Derived from
Although the number of crew working on a workstation is a Overall DR Priority
ORA RTPM
key aspect to avoid wasted labor, it is also important to High Very High
distinguish between single-skilled workers versus cross- High Medium High
trained crew. The former may not be dispatched to another Low Medium
High High
workstation whereas the latter provides more flexibility in Medium Medium Medium
reassignment. Low Low
Without the loss of generality, three fuzzy terms, i.e., low, High Medium
medium and high, have been considered for the number of Low Medium Low
crew working at each workstation (see [14] for details). Based Low Very Low
on the number of crew working on each workstation, and their
skill levels, the rule-base in Table II is used to derived the so C. Integer Programming Module
called crew constraint measure. A low crew constraint would
The objective of this module is to determine the statuses of
be grounds for crew reassignment, whereas a high crew
the workstations (fully/partially operating or shut-down) that
constraint would indicate low priority for crew reassignment.
provides maximum amount of curtailable load possible, while
TABLE II
ensuring the dynamic constraints of the overall plant are met.
RULE BASE FOR CREW MANAGEMENT This module takes into account the real-time dynamics of
Crew Number Crew Skill Crew Constraint inventory accumulation after each workstation (i.e., post-
process inventory) as well as the interrelations between the
Specific-Skilled Medium
Low workstations.
Cross-Trained Low It is assumed that the problem is solved and revisited every
Specific-Skilled High ∆t units of times, e.g., every hour or every half-hour. In
Medium addition, the problem is solved over multiple time periods in
Cross-Trained Low
order to incorporate the concept of accumulation of
Specific-Skilled High inventories over time, as well as the capacity impact of the
High
Cross-Trained Medium loads.
The workstation loading decision is formulated as an
3) RTRM Ranking integer programming problem provided in (2). The objective
Based on the time to maintenance and the crew constraint, is to find the integer variables ui for each time period,
the real-time operational rankings are derived as in Table III. indicating the level at which the ith unit is operational for each
∆t period. In this paper, ui is assumed to be capped at 4,
which means every workstation can operate at 25%, 50%,
75% or 100% of the rated capacity. Clearly, ui = 0 indicates a
unit that is shut down. The objective function is defined as:
T n
Min ∑∑α
t =1 i =1
i ⋅ ( Pi ,base / 4 × ∆t ) ⋅ ui (t )
Subject to:
• Upper and lower limits on post-process inventories for the
individual workstations as well as the overall plant:
n Pi,base Baseline (rated) electric demand consumption at
∀t = 1LT : ∑ I i (t ) ≤ I max
i =1
∀t = 1LT , ∀i = 1L (n − 1) :
I min,i ≤ I i (t ) ≤ I max,i
Determining the lower thresholds Imin would explain the
policy adopted for the manufacturing process. A non-zero
value for Imin moves the process further away from a just-
in-time (JIT) manufacturing strategy. In this paper, the
workstations have been required to build up sufficient
inventory at any point in time such that other workstations
(that depend on their product) can operate at least at 25%
capacity, regardless of whether or not the original
workstation will be shut down for the next period. In other
words:
n Ii
∀i = 1L n : I min,i = ∑ 0.25 × c
j =1,≠i
• Equality constraints expressing the accumulation of post-
process inventory based on the interrelationships between
workstations:
∀t = 1LT , ∀i = 1L n :
ci
I i (t ) = I i (t − 1) + ui (t ) ⋅
4
− ∑u
j =1,≠i
• Inequality constraints for the maximum operational levels
of the workstations: Clearly, the level at which a
workstation can operate will be limited by the amount of
pre-process inventory available. For a workstation i that is
fed from multiple workstations, all the products (or post-
process inventories) of those workstations would need to
be taken into account, and assuming they are all necessary
components (with equal weights) for the product of
workstation i, then the production level of workstation i
would be limited according to (7):
∀t = 1LT , ∀i = 1L n :
min I j (t − 1) ⋅ vij
j =1..n , j ≠ i
ui (t ) ≤
ci / 4
In an effort to maintain linearity in the optimization
constraints, and at the expense of some computational
error, the min function in (7) is replaced by the average
function in the calculations.
• Constraint on the overall production demand: if true based
on the configuration of the industrial process, plant output
can be viewed as the output of the last workstation, i.e.:
∀t = 1LT : I n (t ) ≥ d (t ) (8)
The parameters and variables used in the formulation of
the optimization function are defined as follows:
(2)
αi DR ranking of workstation i based on quasi-dynamic
analysis – this parameter will be provided by the
RTRM
(3) workstation i (kW) if operating at full capacity
ci Production rate of workstation i if operated at full
capacity (this can be units produced per unit of time,
(4)
and will include factors such as number of crew
working on the workstation, machine capacity, setup
time, etc.); to be provided as input
ui Integer variable indicating the operational level of
workstation i, i.e., with some numerical manipulation
this variable would indicate the fraction of the total
capacity being operational
vjk Binary parameter indicating whether workstation j is
directly connected to workstation k (i.e., uses its
product); these parameters can for instance be
provided from the FCM developed for the plant
Post-process inventory at the output of workstation i
j ⋅ v ji (5) (volume, number of units, or $ value)
Imax,i Maximum acceptable post-process inventory for
workstation i
Imin,i Minimum acceptable post-process inventory for
workstation i, also referred to as safety stock for
workstation i
n cj (6) Imax Maximum acceptable post-process inventory for the
j (t ) ⋅
4
⋅ v ji overall system
d Total demand
The optimization problem would start from time t = 0,
where without the loss of generality it is assumed that all
workstations are operational, and creating post-process
inventories. The initial post-process inventory amounts Ii(0)
should also be provided as inputs to the optimization module.
IV. CASE STUDY
The proposed methodology is applied to a typical
industrial manufacturing plant for luxury vehicle cockpit
assembly. The schematic diagram of the plant layout and the
workstations is illustrated in Fig. 3. The plant layout consists
(7) of multiple workstations that are arranged in series or parallel
configurations. The number of crew assigned to each
workstation along with their skill levels are denoted in the
figure. The criticality of the workstations has been determined
based on the definitions provided in Table I; although, this
can also be determined based on expert knowledge available
from plant operators. Without the loss of generality, arbitrary
numbers have been assigned for time to maintenance for each
workstation (defined as in (1)). The FCM generated for the systems. Min/max operators have been adopted for fuzzy
case study is illustrated in Fig. 4. intersection and union. In what follows, the intermediate
Throughout the paper, when necessary, fuzzy systems have calculations have been omitted for conciseness.
been processed using the rules of zero-order Takagi-Sugeno

Fig. 3. Schematic diagram of the luxury vehicle cockpit assembly line.

2 High Low Medium

A. Problem Modeling 3 Medium Medium Medium
1) Quasi-Dynamic Workstation Rankings 4 Low Low Very Low
First, the DR rankings of workstations (parameters αi in 5 High Medium High
6 Low Low Very Low
(2)) are developed based on the rule base in Table IV, and 7 Medium Low Low
according to the data provided in Fig. 3. Table V summarizes 8 Medium Medium Medium
the results. Without the loss of generality, values 0.1, 0.2, 0.5, 9 Low Low Very Low
0.8 and 1.0 have been selected for fuzzy terms very low, low, 10 Low Medium Low
medium, high and very high respectively. 11 Low Low Very Low
2) Workstation Interconnections
TABLE V The interconnections of the workstations (as determined
QUASI-DYNAMIC DR RANKINGS DERIVED FOR WORKSTATIONS from the overall process in Fig. 3, or the FCM in Fig. 4)
Demand Reduction Demand Reduction DR determines the parameters vji.
Workstation Priority based on Priority based on Ranking
ORA RTPM αi
3) Workstation Operational Limits
1 High High Very High The data on the baseline electric demand consumption
Pi,base, the production capacity, and the inventory limit T n

associated with each workstation are provided in the Max ∑∑ u (t ) ,

t =1 i =1
i (9)
Appendix. In the most general case, the inventory limits
subject to constraints (3)–(8). This would represent the
and/or the production capacities can be a function of time
normal operation of the plant, and is referred to here as the
indicating different operational limitations during various
base case scenario.
periods of the day; however, in this paper, without the loss of
Table VI lists the operation level of the workstations for
generality, it is assumed that these parameters remain the
the three time periods under the two scenarios: base case
same throughout the daily operation cycle.
(without demand reduction), and with demand reduction.
4) Plant Input and Demand
It has been assumed that input to the plant that is supplied TABLE VI
from the external resources (i.e, input to workstations 1, 7 and OPERATIONAL LEVELS OF WORKSTATIONS
8) can be provided with no limitations. To portray a more Operational Level (% of full capacity)
general case, The total demand of the plant is considered to Base Case (without
With Demand Reduction
Workstation demand reduction)
be changing based on the time of day; although this is not
Period Period Period Period Period Period
necessary for solving the problem. 1 2 3 1 2 3
1 50 50 50 50 0 0
2 50 75 75 50 0 25
3 50 75 75 50 50 25
4 50 25 75 50 25 50
5 0 25 50 25 0 25
6 25 25 50 25 25 25
7 75 50 75 50 0 0
8 75 25 50 50 0 0
9 50 25 25 50 25 25
10 50 25 25 50 25 25
11 50 75 25 50 75 25

Figure 5 illustrates the hourly demand under the two

scenarios. The demand reduction solution ensures that, while
guaranteeing hourly plant demands, the total system energy
consumption is reduced to 1215kWh compared to the
2360kWh under the base case (maximum production). Figure
6 shows the difference between the two strategies (in terms of
kW) which indicates the potential demand reduction the plant
can offer the utility should a DR event be initiated.
Fig. 4. FCM for the luxury vehicle cockpit assembly case study.

B. Simulation Results
To demonstrate the proposed algorithm, without the loss of
generality, it is assumed here that at time 0 all workstations
(except for workstations 1, 7 and 8 that utilize external
resources) have a starting pre-process inventory of 10 units. It
should be noted that changing this number would change the
final dispatch of the workstations, but does not affect the
generality of the solution proposed. The problem has been
solved for three time step, i.e., T = 3. Also, it has been
assumed that the minimum demand of the plant for these three
time periods is 15, 14 and 20 units respectively.
In order to analyze the impact of the proposed dynamic
demand reduction scheme on the overall performance of the
system, a base case has been established where the objective
Fig. 5. Hourly electric power consumption under two scenarios: with and
of the plant is to maximize production subject to the without demand reduction.
operational constraints. In this case, the optimization problem
can be formulated as:
C. Discussion at an industrial site through demand reduction. The proposed
The simulation results showed that with the proposed solution first considers the offline and quasi-dynamic
solution, it is possible for the industrial plant to maintain the operational constraints of the plant in order to assign weights
requested demands while minimizing the electric power (priority ranking) to the workstations targeted for demand
consumption. Obviously, the decision to proceed with the reduction. Then, through an integer programming based
reduced demand reduction regime requires the plant operator optimization approach, it incorporates dynamic constraints
to perform a financial analysis. Under the base case scenario, such as post-process inventory buildup in order to finalize the
the plant manufactures more products which is directly workstations that can operate under demand curtailment or
translated into higher revenue. However, this could also mean demand reduction, while ensuring the overall demand of the
a possible inventory buildup at the output of the plant (if all plant is met. Such a scheme can be used by itself, or in
the products cannot be sold), possible need for maintenance conjunction with other alternatives such as on-site generation
of the workstations that are operating at higher capacities, and and energy storage.
higher electricity bill. On the other hand, reduced demand
means that less number of products are manufactured APPENDIX
(although adhering to the minimum required demand), which TABLE VII
can lead to lower revenue. However, lower electricity bill and OPERATIONAL DATA FOR WORKSTATIONS
Workstation Ii,max (units) Pi,base (kW) ci (units/time)
incentive payments as a result of participating in a demand 1 20 100 8
reduction can further incentivize this strategy. A financial 2 30 120 5
cost-benefit analysis would determine which scenario the 3 30 200 4
plant operator would choose, but this would be a case-by-case 4 20 80 5
analysis and falls outside the scope of this paper. 5 25 80 5
6 22 340 4
7 20 360 3
8 25 80 5
9 25 60 4
10 25 60 5
11 25 60 4

Fig. 6. Potential demand reduction capacity available to be deployed at the
plant using the proposed solution.
V. CONCLUDING REMARKS
Demand response is an integral part of the Smart Grid
paradigm. By reducing the demand during peak times or
shifting the demand from peak to non-peak hours, DR helps
stabilize the market and provides financial benefits for both
the utility and the customers. In addition, by postponing the
need to grid capacity expansion, it can offer substantial
environmental benefits. DR for residential and most
commercial customers is relatively straightforward to
implement, mostly due to the non-criticality of the loads
involved. However, DR for industrial customers faces unique
challenges.
This paper proposed a scheme based on fuzzy systems and
mathematical optimization techniques for implementing DR
REFERENCES
[1] “Assessment of Demand Response and Advanced Metering,” Staff
Report, Federal Energy Regulatory Commission, Aug. 2006.
[2] Thomas Weisel Partners, “A Primer on Demand Response,” White
Paper, Oct. 2007.
[3] S. Kiliccote, M.A. Piette and D. Hansen, “Advaned Controls and
Communications for Demand Response and Energy Efficiency in
Commercial Buildings,” in Proc. Carnegie Mellon Conf in Electric
Power Systems, Pittsburgh, PA, USA, Jan. 2006, pp. 1-10.
[4] S. Mohagheghi, J. Stoupis, Z. Wang, Z. Li and H. Kazemzadeh,
“Demand Response Architecture- Integration into the Distribution
Management System,” in Proc. IEEE SmartGridComm, Gaithersburg,
MD, USA, Oct. 2010.
[5] A. Brooks, E. Lu, D. Reicher, C. Spirakis and B. Weihl, “Demand
Dispatch,” Power & Energy Magazine, vol. 8, no. 3, May/Jun. 2010,
pp. 21-29.
[6] “Demand Response: Design Principles for Creating Customer and
Market Value,” Technical Report, Peak Load Management Alliance,
Nov. 2002.
[7] J. Han and M.A. Piette, “Solutions for Summer Electric Power
Shortages: Demand Response and its Applications in Air Conditioning
and Refrigeration Systems,” Journal of Refrigeration, Air
Conditioning and Electric Power Machinery, vol. 29, issue 1, pp. 1-4,
Jan. 2008.
[8] E. Koch and M.A. Piette, “Architecture Concepts and Technical Issues
for an Open, Interoperable Automated Demand Response
Infrastructure,” presented at the Grid Interop Forum, Albuquerque,
NM, USA, Nov. 2007.
[9] S. Kiliccote and M.A. Piette, “Advanced Control Technologies and
Strategies Linking Demand Response and Energy Efficiency,” in Proc.
Intl Conf for Enhanced Building Operations, Pittsburgh, PA, USA,
Sept. 2005.
[10] J.G. Roos and I.E. Lane, “Industrial Power Demand Response Analysis
for One-Part Real-Time Pricing,” IEEE Transactions on Power
Systems, vol. 13, no. 1, pp. 159-164, Feb. 1998.
[11] J. Duanmu and K. Taaffe, “Measuring Manufacturing Throughput
Using Takt Time Analysis and Simulation,” in Proc. Conference on
Winter Simulation, 2007.
[12] Y. Chen, K.W. Li and S.F. Liu, “A Comparative Study on Multicriteria
ABC Analysis in Inventory Management,” in Proc. IEEE Intl. Conf. on
Man, Machines and Cybernetics, Singapore, Oct. 2008, pp. 3280-
3285.
[13] S. Ghosh and R.J. Gagnon, “A Comprehensive Literature Review and
Analysis of the Design, Balancing and Scheduling of Assembly
Systems,” International Journal of Production Research, vol. 27, no.
4, pp. 637-670, 1989.
[14] S. Mohagheghi and N. Raji, “Intelligent Demand Response Scheme for
Energy Management of Industrial Plants,” in Proc. IEEE IAS, Las
Vegas, NV, USA, Oct. 2012.
[15] S. Coe, A. Ott and D. Pratt, “Demanding Standards,” Power & Energy
Magazine, vol. 8, no. 3, May/Jun. 2010, pp. 55-59.
[16] I. Kuzle, D. Bošnjak and S. Tešnjak, “An Overview of Ancillary
Services in an Open Market Environment,” in Proc. Mediterranean
Conference on Control and Automation, Athens, Greece, July 2007.
[17] X. Yu and L.M. Tolbert, “Ancillary Services Provided from DER with
Power Electronics Interface,” in Proc. IEEE PES, Montreal, Quebec,
Canada, Oct. 2006.
[18] M.M. El-Metwally, M.S. El-Sobki, H.A. Attia and S.A. Wahdan,
“Priority Ranking of Industrial Loads and Application of Demand Side
Management Technique,” in Proc. International Middle East Power
Systems Conference, Dec. 2006.
[19] Y. Tang, F. Xu, and L. Chen, “Research into Possibility of Smart
Industrial Load Participating into Demand Response to Supply the
Power System,” in Proc. China International Conference on
Electricity Distribution, Nanjing, China, Sept. 2010.
[20] B. Delfino, F. Croce, P.A. Fazzini, S. Massucco, A. Morini, F.
Silvestro and M. Sivieri, “Operation and Management of the Electric
System for Industrail Plants: An Expert System Prototype for Load-
Shedding Operator Assistance,” in Proc. IEEE IAS, Rome, Italy,
August 2000, pp. 3260-3268.
[21] F. Shokooh, J.J. Dai, S. Shokooh, J. Tastet, H. Castro, T. Khandelwal
and G. Donner, “An Intelligent Load Shedding System Application in a
Large Industrial Facility,” in Proc. IEEE IAS, Oct. 2005, pp. 417-425.
[22] C.T. Hsu, H.J. Chuang and C.S. Chen, “Artificial Neural Network
Based Adaptive Load Shedding for an Industrial Cogeneration
Facility,” in Proc. IEEE IAS, Austrailia, Oct. 2008.
[23] H.P. Inamdar and R.P. Hasabe, “IT Based Energy Management
through Demand Side in the Industrial Sector,” in Proc. International
Conference on Control, Automation, Communication and Energy
Conservation, India, June 2009.
[24] B. Kosko, “Fuzzy Cognitive Maps,” International Journal Man-
Machine Studies, vol. 4, pp. 65-75, 1986.