Region-wise evaluation of price-based demand response programs in Japan’s wholesale electricity market considering microeconomic equilibrium

Real-time pricing demand response programs (RTP-DRPs) are practical measures that ensure the end user’s profitability from using electricity by adjusting the supply and demand equilibrium without activating costly solutions. This study explores the potential of RTP-DRPs by developing and applying a region-wise modeling approach based on maximizing the end user’s social welfare in the wholesale electricity market in Japan. The regions of the wholesale market are classified based on their response into regions with excess supply, regions with high demand burden, and regular suppliers of inter-regional connections. The results revealed that the RTP-DRPs could potentially reduce the peak demand of the residential sector in Chubu, Chugoku, Kansai, Kyushu, Tokyo, and Tohoku by 1.91%–7.81%. Meanwhile, in Hokkaido, Hokuriku, and Shikoku, by 16.13%–22.9%. The avoided greenhouse emission (GHG) in Tokyo is estimated to be 82.6 and 192.2 tons in summer and winter, respectively.