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Price-Responsive Demand Management for a Smart Grid World


  • Chao, Hung-po


Price-responsive demand is essential for the success of a smart grid. However, existing demand-response programs run the risk of causing inefficient price formation. This problem can be solved if each retail customer could establish a contract-based baseline through demand subscription before joining a demand-response program.

Suggested Citation

  • Chao, Hung-po, 2010. "Price-Responsive Demand Management for a Smart Grid World," The Electricity Journal, Elsevier, vol. 23(1), pages 7-20, January.
  • Handle: RePEc:eee:jelect:v:23:y:2010:i:1:p:7-20

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    References listed on IDEAS

    1. Paul Simshauser & Phillip Wild, 2009. "The Western Australian Power Dilemma ," Australian Economic Papers, Wiley Blackwell, vol. 48(4), pages 342-369, December.
    2. Paul Simshauser & Elizabeth Molyneux & Michelle Shepherd, 2010. "The Entry Cost Shock and the Re-rating of Power Prices in New South Wales, Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(2), pages 114-135.
    3. Paul Simshauser, 2008. "The Dynamic Efficiency Gains from Introducing Capacity Payments in the National Electricity Market," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 349-370, December.
    4. Peter C. Reiss & Matthew W. White, 2008. "What changes energy consumption? Prices and public pressures," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 636-663.
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    Cited by:

    1. Clastres, Cédric, 2011. "Smart grids: Another step towards competition, energy security and climate change objectives," Energy Policy, Elsevier, vol. 39(9), pages 5399-5408, September.
    2. Chao, Hung-po, 2011. "Efficient pricing and investment in electricity markets with intermittent resources," Energy Policy, Elsevier, vol. 39(7), pages 3945-3953, July.
    3. Claire Bergaentzlé & Cédric Clastres & Haikel Khalfallah, 2014. "Demand-side management and European environmental and energy goals: an optimal complementary approach," Post-Print halshs-00928678, HAL.
    4. Yang, Liu & Dong, Ciwei & Wan, C.L. Johnny & Ng, Chi To, 2013. "Electricity time-of-use tariff with consumer behavior consideration," International Journal of Production Economics, Elsevier, vol. 146(2), pages 402-410.
    5. Claude Crampes & Thomas-Olivier Léautier, 2015. "Demand response in adjustment markets for electricity," Journal of Regulatory Economics, Springer, vol. 48(2), pages 169-193, October.
    6. Arteconi, A. & Hewitt, N.J. & Polonara, F., 2012. "State of the art of thermal storage for demand-side management," Applied Energy, Elsevier, vol. 93(C), pages 371-389.
    7. Claire Bergaentzlé & Cédric Clastres, 2013. "Demand side management in an integrated electricity market: what are the impacts on generation and environmental concerns ?," Post-Print halshs-00839116, HAL.
    8. Hung-po Chao, 2011. "Demand response in wholesale electricity markets: the choice of customer baseline," Journal of Regulatory Economics, Springer, vol. 39(1), pages 68-88, February.
    9. Aghaei, Jamshid & Alizadeh, Mohammad-Iman, 2013. "Demand response in smart electricity grids equipped with renewable energy sources: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 64-72.
    10. 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).
    11. Claude Crampes & Thomas-Olivier Léautier, 2012. "Distributed Load-Shedding in the Balancing of Electricity Markets," RSCAS Working Papers 2012/40, European University Institute.
    12. Tsitsiklis, John N. & Xu, Yunjian, 2015. "Pricing of fluctuations in electricity markets," European Journal of Operational Research, Elsevier, vol. 246(1), pages 199-208.
    13. David P. Brown & David E. M. Sappington, 2016. "On the optimal design of demand response policies," Journal of Regulatory Economics, Springer, vol. 49(3), pages 265-291, June.
    14. repec:spo:wpecon:info:hdl:2441/c6t1fl36hv9s7q89j8m3l01c9 is not listed on IDEAS
    15. Salies, Evens, 2013. "Real-time pricing when some consumers resist in saving electricity," Energy Policy, Elsevier, vol. 59(C), pages 843-849.
    16. Heshmati, Almas, 2012. "Survey of Models on Demand, Customer Base-Line and Demand Response and Their Relationships in the Power Market," IZA Discussion Papers 6637, Institute for the Study of Labor (IZA).
    17. Cédric Clastres, 2011. "Smart grids : Another step towards competition, energy security and climate change objectives," Post-Print halshs-00617702, HAL.
    18. Hung-po Chao & Mario DePillis, 2013. "Incentive effects of paying demand response in wholesale electricity markets," Journal of Regulatory Economics, Springer, vol. 43(3), pages 265-283, June.
    19. Lin, Chen-Chun & Yang, Chia-Han & Shyua, Joseph Z., 2013. "A comparison of innovation policy in the smart grid industry across the pacific: China and the USA," Energy Policy, Elsevier, vol. 57(C), pages 119-132.
    20. Bergaentzlé, Claire & Clastres, Cédric & Khalfallah, Haikel, 2014. "Demand-side management and European environmental and energy goals: An optimal complementary approach," Energy Policy, Elsevier, vol. 67(C), pages 858-869.
    21. Katz, Jonas, 2014. "Linking meters and markets: Roles and incentives to support a flexible demand side," Utilities Policy, Elsevier, vol. 31(C), pages 74-84.
    22. Hung-po Chao, 2012. "Competitive electricity markets with consumer subscription service in a smart grid," Journal of Regulatory Economics, Springer, vol. 41(1), pages 155-180, February.

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