In this paper, we integrate a Demand Response (DR) program into the multi-objective
dynamic economic emission dispatch (DEED) optimization problem. The resulting
optimization problem is termed DR-DEED. The DR program is a time based program
known as the Time of Use DR program. The DR program has been developed using
the customers’ Price Elasticity Matrices, which models the customer behavior under
different conditions. An interactive control strategy between utility and consumers is
proposed for the combined DR-DEED model, which determines the optimal power to
be generated by minimizing fuel, emissions, and DR costs and also the optimal price.
The customer in light of the utility’s optimal price minimizes its electricity cost and
optimally schedules power consumption. Obtained results indicate that DR programs
are mutually beneficial to utility and consumers alike and can bring about desired
demand reduction in the power system.