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Title: An R and D Agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets

Abstract

Recent electricity price spikes are painful reminders of the value that meaningful demand-side responses could bring to the restructuring US electricity system. Review of the aggregate offers made by suppliers confirms that even a modest increase demand elasticity could dramatically reduce these extremes in price volatility. We submit that dramatically increased customer participation in these markets to enhance system reliability and reduce price volatility is sorely needed. Indeed, allowing customers to manage their loads in response to system conditions might be thought of as the ultimate reliability resource. Most would agree that meaningful demand-side responses to price are the hallmark of a well-functioning competitive market (Kirby and Kueck 1999). Yet, in today's markets for electricity, little or no such response is evident. In effect, today's markets are incomplete; they represent only half of what a truly competitive market requires. The reason is simple: customers currently do not experience directly the time-varying costs of their consumption decisions. Consequently, they have no incentive to modify these decisions in ways that might enhance system reliability or improve the efficiency of the markets in which electricity is traded. We submit that increased customer participation is a necessary step in the evolution toward more efficientmore » markets for electricity and ancillary services. Toward this end, this paper outlines an agenda for public-interest R&D in support of this objective.« less

Authors:
; ; ; ; ; ; ; ; ;
Publication Date:
Research Org.:
Lawrence Berkeley National Lab., CA (US)
Sponsoring Org.:
USDOE Assistant Secretary for Energy Efficiency and Renewable Energy (US)
OSTI Identifier:
775161
Report Number(s):
LBNL-47026
R&D Project: 673341; TRN: AH200120%%430
DOE Contract Number:
AC03-76SF00098
Resource Type:
Conference
Resource Relation:
Conference: IEEE Winter 2001, Columbus, OH (US), 01/28/2001--01/31/2001; Other Information: PBD: 1 Oct 2000
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY AND ECONOMY; EFFICIENCY; ELECTRICITY; MARKET; PRICES; RELIABILITY; ELECTRIC UTILITIES; LOAD MANAGEMENT; COMPETITION; PUBLIC OPINION

Citation Formats

Eto, J., Marnay, C., Goldman, C., Kueck, J., Kirby, B., Dagle, J., Alvarado, F., Mount, T., Oren, S., and Martinez, C. An R and D Agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets. United States: N. p., 2000. Web.
Eto, J., Marnay, C., Goldman, C., Kueck, J., Kirby, B., Dagle, J., Alvarado, F., Mount, T., Oren, S., & Martinez, C. An R and D Agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets. United States.
Eto, J., Marnay, C., Goldman, C., Kueck, J., Kirby, B., Dagle, J., Alvarado, F., Mount, T., Oren, S., and Martinez, C. Sun . "An R and D Agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets". United States. doi:. https://www.osti.gov/servlets/purl/775161.
@article{osti_775161,
title = {An R and D Agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets},
author = {Eto, J. and Marnay, C. and Goldman, C. and Kueck, J. and Kirby, B. and Dagle, J. and Alvarado, F. and Mount, T. and Oren, S. and Martinez, C.},
abstractNote = {Recent electricity price spikes are painful reminders of the value that meaningful demand-side responses could bring to the restructuring US electricity system. Review of the aggregate offers made by suppliers confirms that even a modest increase demand elasticity could dramatically reduce these extremes in price volatility. We submit that dramatically increased customer participation in these markets to enhance system reliability and reduce price volatility is sorely needed. Indeed, allowing customers to manage their loads in response to system conditions might be thought of as the ultimate reliability resource. Most would agree that meaningful demand-side responses to price are the hallmark of a well-functioning competitive market (Kirby and Kueck 1999). Yet, in today's markets for electricity, little or no such response is evident. In effect, today's markets are incomplete; they represent only half of what a truly competitive market requires. The reason is simple: customers currently do not experience directly the time-varying costs of their consumption decisions. Consequently, they have no incentive to modify these decisions in ways that might enhance system reliability or improve the efficiency of the markets in which electricity is traded. We submit that increased customer participation is a necessary step in the evolution toward more efficient markets for electricity and ancillary services. Toward this end, this paper outlines an agenda for public-interest R&D in support of this objective.},
doi = {},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Sun Oct 01 00:00:00 EDT 2000},
month = {Sun Oct 01 00:00:00 EDT 2000}
}

Conference:
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  • The restructuring of regional electricity markets in the U.S. has been accompanied by numerous problems, including generation capacity shortages, transmission congestion, wholesale price volatility, and reduced system reliability. These problems have created significant new opportunities for technologies and business approaches that allow load serving entities and other aggregators, to control and manage the load patterns of their wholesale or retail end-users. These technologies and business approaches for manipulating end-user load shapes are known as Load Management or, more recently, Demand Responsive programs. Lawrence Berkeley National Laboratory (LBNL) is conducting case studies on innovative demand responsive programs and presents preliminary resultsmore » for five case studies in this paper. These case studies illustrate the diversity of market participants and range of technologies and business approaches and focus on key program elements such as target markets, market segmentation and participation results; pricing scheme; dispatch and coordination; measurement, verification, and settlement; and operational results where available.« less
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