A mathematical modelling framework for optimal demand response incentives and retrofit

In this paper, a mathematical optimization model is presented for a demand response program in South Africa. The demand response scheme termed Standard Product Program encourages customers to replace inefficient energy appliances with energy efficient ones. The state owned utility, pays an incentive to willing and participating customers. The incentive to be offered by the utility is very important and there is a need for it to be optimal, attractive to customers and at the same time achieve desired program objectives. The mathematical model presented in this paper is a multi-objective optimization problem with the first objective to minimize the utility's levelized cost and the second to maximize the total power saved. Model validation is done using data from the South African Standard Product Program. Obtained results indicate the robustness, practicality and accuracy of the developed model.