  The widespread diffusion of distributed energy resources, especially those
based on renewable energy, and energy storage devices has deeply modified power
systems. As a consequence, demand response, the ability of customers to respond
to regulating signals, has moved from large high-voltage and medium-voltage
end-users to small, low-voltage, customers. In order to be effective, the
participation to demand response of such small players must be gathered by
aggregators. The role and the business models of these new entities have been
studied in literature from a variety of viewpoints. Demand response can be
clearly applied by sending a dedicated price signal to customers, but this
methodology cannot obtain a diverse, punctual, predictable, and reliable
response. These characteristics can be achieved by directly controlling the
loads units. This approach involves communication problems and technological
readiness. This paper proposes a fully decentralized mixed integer linear
programming approach for demand response. In this framework, each load unit
performs an optimization, subject to technical and user-based constraints, and
gives to the aggregator a desired profile along with a reserve, which is
guaranteed to comply with the constraints. In this way, the aggregator can
trade the reserve coming from several load units, being the only interface to
the market. Upon request, then, the aggregator communicates to the load units
the modifications to their desired profiles without either knowing or caring
how this modification would be accomplished. The effectiveness is simulated on
200 realistic load units.
