Abstract
Under the smart distribution paradigm, energy service providers act as a middle-man to form the aggregation of a large number of small consumers and motivate them by introducing an incentive program. This paper proposes an algorithm for direct load control in aggregated demand response programs and introduces the concept of “demand reduction bidding” as an incentive program to minimize inconvenience to consumers. The algorithm will help in minimizing network congestion and thus reduce the gap between the available generation capacity and the demand.