A grid-scale study of demand bidding by large industrial users

Journal Article · 01 February 2026 · Computers & Chemical Engineering

DOI: https://doi.org/10.1016/j.compchemeng.2025.109442 · OSTI ID:3012473

Petra, Cosmin ^[1]; Baldea, Michael; Tang, Xin

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1. Lawrence Livermore National Laboratory

A demand bidding mechanism for engaging large industrial electricity users in the operation of the power grid is presented. Demand bidding is formulated as an optimization problem based on a modified version of the alternating current optimal power flow problem, and can be interpreted as a tâtonnement process between the grid operator and electricity users. The work provides the first – to the authors’ knowledge – grid-scale case study of demand bidding, using a synthetic grid structure in the footprint of the grid of Texas. Results reveal that the demand bidding lowers overall power generation costs, but economic benefits plateau as the number of participants increases. Transmission line and transformer capacity constraints become the limiting factors, revealing that expanding and fortifying the transmission infrastructure is key to expanding demand-side participation. Demand bidding does not substantially alter the optimal operation of existing bidding entities when the number of bidders increases, thereby supporting existing bidders to stay in the system and encouraging new ones to join.

• Research Organization: Lawrence Livermore National Laboratory (LLNL), Livermore, CA (United States)
• Sponsoring Organization: USDOE National Nuclear Security Administration (NNSA)
• Grant/Contract Number: AC52-07NA27344
• OSTI ID: 3012473
• Report Number(s): LLNL-JRNL-2002340
• Journal Information: Computers & Chemical Engineering, Journal Name: Computers & Chemical Engineering Journal Issue: N/A Vol. 205
• Country of Publication: United States
• Language: English