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Fostering economic demand response in the Midwest ISO

Author

Listed:
  • Faruqui, A.
  • Hajos, A.
  • Hledik, R.M.
  • Newell, S.A.

Abstract

The Midwest Independent System Operator (MISO) runs the power grid in 14 states and one Canadian province and has a peak demand of some 116,000MW. Its operational area is richly supplied with reliability-triggered demand response programs such as direct load control of residential appliances and curtailable/interruptible rates for commercial and industrial customers. However, economic demand response programs are lacking. This paper discusses three different ways in which such programs can be introduced in the wholesale energy markets run by MISO. These include, first, an approach in which utilities and load serving entities move retail customers to dynamic pricing and other time-based pricing rates; second, an approach in which these same entities and possibly third-parties bid price responsive demand curves into the wholesale market; and third, an approach in which demand response is bid as a supply resource into the wholesale market.

Suggested Citation

  • Faruqui, A. & Hajos, A. & Hledik, R.M. & Newell, S.A., 2010. "Fostering economic demand response in the Midwest ISO," Energy, Elsevier, vol. 35(4), pages 1544-1552.
  • Handle: RePEc:eee:energy:v:35:y:2010:i:4:p:1544-1552
    DOI: 10.1016/j.energy.2009.09.014
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hobman, Elizabeth V. & Frederiks, Elisha R. & Stenner, Karen & Meikle, Sarah, 2016. "Uptake and usage of cost-reflective electricity pricing: Insights from psychology and behavioural economics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 455-467.
    2. repec:eee:appene:v:210:y:2018:i:c:p:1290-1298 is not listed on IDEAS
    3. Nikzad, Mehdi & Mozafari, Babak & Bashirvand, Mahdi & Solaymani, Soodabeh & Ranjbar, Ali Mohamad, 2012. "Designing time-of-use program based on stochastic security constrained unit commitment considering reliability index," Energy, Elsevier, vol. 41(1), pages 541-548.
    4. Feuerriegel, Stefan & Neumann, Dirk, 2014. "Measuring the financial impact of demand response for electricity retailers," Energy Policy, Elsevier, vol. 65(C), pages 359-368.
    5. Fotouhi Ghazvini, Mohammad Ali & Faria, Pedro & Ramos, Sergio & Morais, Hugo & Vale, Zita, 2015. "Incentive-based demand response programs designed by asset-light retail electricity providers for the day-ahead market," Energy, Elsevier, vol. 82(C), pages 786-799.
    6. Katz, Jonas & Andersen, Frits Møller & Morthorst, Poul Erik, 2016. "Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system," Energy, Elsevier, vol. 115(P3), pages 1602-1616.
    7. Blumsack, Seth & Fernandez, Alisha, 2012. "Ready or not, here comes the smart grid!," Energy, Elsevier, vol. 37(1), pages 61-68.
    8. Shen, Bo & Ghatikar, Girish & Lei, Zeng & Li, Jinkai & Wikler, Greg & Martin, Phil, 2014. "The role of regulatory reforms, market changes, and technology development to make demand response a viable resource in meeting energy challenges," Applied Energy, Elsevier, vol. 130(C), pages 814-823.
    9. Liu, Yingqi, 2017. "Demand response and energy efficiency in the capacity resource procurement: Case studies of forward capacity markets in ISO New England, PJM and Great Britain," Energy Policy, Elsevier, vol. 100(C), pages 271-282.
    10. Olmos, Luis & Ruester, Sophia & Liong, Siok-Jen & Glachant, Jean-Michel, 2011. "Energy efficiency actions related to the rollout of smart meters for small consumers, application to the Austrian system," Energy, Elsevier, vol. 36(7), pages 4396-4409.
    11. Galo, Joaquim J.M. & Macedo, Maria N.Q. & Almeida, Luiz A.L. & Lima, Antonio C.C., 2014. "Criteria for smart grid deployment in Brazil by applying the Delphi method," Energy, Elsevier, vol. 70(C), pages 605-611.
    12. Kim, Jin-Ho & Shcherbakova, Anastasia, 2011. "Common failures of demand response," Energy, Elsevier, vol. 36(2), pages 873-880.
    13. Greening, Lorna A., 2010. "Demand response resources: Who is responsible for implementation in a deregulated market?," Energy, Elsevier, vol. 35(4), pages 1518-1525.
    14. Evens Salies, 2012. "Real-time pricing when consumers have saving costs," Documents de Travail de l'OFCE 2012-11, Observatoire Francais des Conjonctures Economiques (OFCE).
    15. Lagarto, João & Sousa, Jorge A.M. & Martins, Álvaro & Ferrão, Paulo, 2014. "Market power analysis in the Iberian electricity market using a conjectural variations model," Energy, Elsevier, vol. 76(C), pages 292-305.
    16. repec:spo:wpecon:info:hdl:2441/c6t1fl36hv9s7q89j8m3l01c9 is not listed on IDEAS
    17. Feuerriegel, Stefan & Neumann, Dirk, 2016. "Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications," Energy Policy, Elsevier, vol. 96(C), pages 231-240.
    18. Salies, Evens, 2013. "Real-time pricing when some consumers resist in saving electricity," Energy Policy, Elsevier, vol. 59(C), pages 843-849.
    19. Valenzuela, Jorge & Thimmapuram, Prakash R. & Kim, Jinho, 2012. "Modeling and simulation of consumer response to dynamic pricing with enabled technologies," Applied Energy, Elsevier, vol. 96(C), pages 122-132.
    20. repec:eee:energy:v:167:y:2019:i:c:p:1266-1277 is not listed on IDEAS
    21. Vardakas, John S. & Zorba, Nizar & Verikoukis, Christos V., 2014. "Scheduling policies for two-state smart-home appliances in dynamic electricity pricing environments," Energy, Elsevier, vol. 69(C), pages 455-469.
    22. Wang, Yong & Li, Lin, 2015. "Time-of-use electricity pricing for industrial customers: A survey of U.S. utilities," Applied Energy, Elsevier, vol. 149(C), pages 89-103.
    23. repec:gam:jeners:v:11:y:2018:i:12:p:3314-:d:185974 is not listed on IDEAS
    24. repec:eee:enepol:v:107:y:2017:i:c:p:1-10 is not listed on IDEAS
    25. Zhou, Kaile & Yang, Shanlin, 2015. "Demand side management in China: The context of China’s power industry reform," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 954-965.

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    Keywords

    Demand response; Dynamic pricing; Midwest ISO;

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