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Benefits of a Demand Response Exchange Participating in Existing Bulk-Power Markets

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  • Venkat Durvasulu

    (Department of Electrical Engineering and Computer Science, South Dakota State University, Brookings, SD 57007, USA)

  • Timothy M. Hansen

    (Department of Electrical Engineering and Computer Science, South Dakota State University, Brookings, SD 57007, USA)

Abstract

In most U.S. market sponsored demand response (DR) programs, revenue earned from energy markets has been relatively low compared to DR used for capacity markets and ancillary services. This paper presents an aggregated DR model participating in the bulk-power market as a service through a pool-based entity called demand response exchange (DRX). Using the DRX structure, DR providers can participate in energy markets as a service to benefit bulk-power market entities. The benefits and challenges to each market entity using DR-as-a-service are presented in an extended review. The DRX model in this study is a market entity that operates with the day-ahead market to select DR offers that minimize electric utility payments. A case study was performed using the proposed DRX model on the IEEE 24-bus system, augmented to represent actual bulk-power market prices to study factors that influence utility payments under the DRX-market paradigm. Two high-price days of the PJM market were simulated, and it was shown for a single day on the augmented test case that spending $69,955 for DR-as-a-service results in a reduction of utility payments of $864,199. The day-ahead generator supply curve, network congestion, and DR curtailment were found to be the most influencing factors that impact the benefit of using DR-as-a-service.

Suggested Citation

  • Venkat Durvasulu & Timothy M. Hansen, 2018. "Benefits of a Demand Response Exchange Participating in Existing Bulk-Power Markets," Energies, MDPI, vol. 11(12), pages 1-21, December.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:12:p:3361-:d:186903
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    References listed on IDEAS

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    Cited by:

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    2. Tahir, Muhammad Faizan & Chen, Haoyong & Khan, Asad & Javed, Muhammad Sufyan & Cheema, Khalid Mehmood & Laraik, Noman Ali, 2020. "Significance of demand response in light of current pilot projects in China and devising a problem solution for future advancements," Technology in Society, Elsevier, vol. 63(C).
    3. Han, Rushuai & Hu, Qinran & Cui, Hantao & Chen, Tao & Quan, Xiangjun & Wu, Zaijun, 2022. "An optimal bidding and scheduling method for load service entities considering demand response uncertainty," Applied Energy, Elsevier, vol. 328(C).
    4. Brown, Marilyn A. & Chapman, Oliver, 2021. "The size, causes, and equity implications of the demand-response gap," Energy Policy, Elsevier, vol. 158(C).
    5. Jen-Hao Teng & Chia-Hung Hsieh, 2021. "Modeling and Investigation of Demand Response Uncertainty on Reliability Assessment," Energies, MDPI, vol. 14(4), pages 1-17, February.
    6. Neda Hajibandeh & Miadreza Shafie-khah & Sobhan Badakhshan & Jamshid Aghaei & Sílvio J. P. S. Mariano & João P. S. Catalão, 2019. "Multi-Objective Market Clearing Model with an Autonomous Demand Response Scheme," Energies, MDPI, vol. 12(7), pages 1-16, April.

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