Consumer’s Price Elasticity of Demand Modeling on Electricity Markets using Ant Colony Optimization

Automated Metering Infrastructure (AMI) is a energy technology that would allow consumers to exhibit price elasticity of demand under smart-grid environments. The market power of the generation and transmission companies can be mitigated when consumers respond to price signals. Such responses by consumers can also result in reductions in price spikes, consumer energy bills, and emissions of greenhouse gases and other pollutants. Here, proposes a novel binary ant colony optimization (NBACO) method. The proposed NBACO is based on the concept and principles of ant colony optimization (ACO), and developed to solve the binary and combinatorial optimization problems. It simulates restructured electricity markets, to explore the impact of consumers’ price elasticity of demand on the performance of the electricity market. An 11-node test network with eight generation companies and five aggregated consumers is simulated for a period of one month. At presents of new updating rule for local and global search, the proposed NBACO is applied to test power systems of up to 100-unit along with 24-hour load demands.