How will demand response aggregators affect electricity markets? A Cournot game analysis

Chen Chen, Shalinee Kishore, Zhifang Wang, Mahnoosh Alizadeh, Anna Scaglione

Research output: Chapter in Book/Report/Conference proceedingConference contribution

22 Citations (Scopus)

Abstract

The future electricity grid will include greater and more sophisticated demand side participation. Favored by recent rulings by the Federal Energy Regulatory Commission (FERC), Demand Response (DR) aggregators can combine load requests from a large consumer base and provide load modifications that will be compensated in the wholesale electricity market at the market price. This paper examines the market effects of including Green Energy Management System (GEMS), a future Demand Response (DR) program that will take advantage of operational flexibility of certain types of loads to shape demand profile. Adopting a Cournot game model, we give equilibrium analysis of wholesale electricity market incorporating GEMS as a DR aggregator. The players in the game include traditional generators, the GEMS, and the Independent System Operator (ISO). We provide generalized forms of the optimality conditions for each of these players and show that under certain conditions, the market equilibrium exists and is unique. Our numerical results indicate that the inclusion of GEMS within the power network reduces the average market price of electricity and saves money for customers.

Original languageEnglish (US)
Title of host publication5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012
DOIs
StatePublished - 2012
Externally publishedYes
Event5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012 - Rome, Italy
Duration: May 2 2012May 4 2012

Other

Other5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012
CountryItaly
CityRome
Period5/2/125/4/12

Fingerprint

Energy management systems
Electricity
Power markets

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Signal Processing

Cite this

Chen, C., Kishore, S., Wang, Z., Alizadeh, M., & Scaglione, A. (2012). How will demand response aggregators affect electricity markets? A Cournot game analysis. In 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012 [6217839] https://doi.org/10.1109/ISCCSP.2012.6217839

How will demand response aggregators affect electricity markets? A Cournot game analysis. / Chen, Chen; Kishore, Shalinee; Wang, Zhifang; Alizadeh, Mahnoosh; Scaglione, Anna.

5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012. 2012. 6217839.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Chen, C, Kishore, S, Wang, Z, Alizadeh, M & Scaglione, A 2012, How will demand response aggregators affect electricity markets? A Cournot game analysis. in 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012., 6217839, 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012, Rome, Italy, 5/2/12. https://doi.org/10.1109/ISCCSP.2012.6217839
Chen C, Kishore S, Wang Z, Alizadeh M, Scaglione A. How will demand response aggregators affect electricity markets? A Cournot game analysis. In 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012. 2012. 6217839 https://doi.org/10.1109/ISCCSP.2012.6217839
Chen, Chen ; Kishore, Shalinee ; Wang, Zhifang ; Alizadeh, Mahnoosh ; Scaglione, Anna. / How will demand response aggregators affect electricity markets? A Cournot game analysis. 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012. 2012.
@inproceedings{f97cb37adede458db9fc692c3f0b1cdf,
title = "How will demand response aggregators affect electricity markets? A Cournot game analysis",
abstract = "The future electricity grid will include greater and more sophisticated demand side participation. Favored by recent rulings by the Federal Energy Regulatory Commission (FERC), Demand Response (DR) aggregators can combine load requests from a large consumer base and provide load modifications that will be compensated in the wholesale electricity market at the market price. This paper examines the market effects of including Green Energy Management System (GEMS), a future Demand Response (DR) program that will take advantage of operational flexibility of certain types of loads to shape demand profile. Adopting a Cournot game model, we give equilibrium analysis of wholesale electricity market incorporating GEMS as a DR aggregator. The players in the game include traditional generators, the GEMS, and the Independent System Operator (ISO). We provide generalized forms of the optimality conditions for each of these players and show that under certain conditions, the market equilibrium exists and is unique. Our numerical results indicate that the inclusion of GEMS within the power network reduces the average market price of electricity and saves money for customers.",
author = "Chen Chen and Shalinee Kishore and Zhifang Wang and Mahnoosh Alizadeh and Anna Scaglione",
year = "2012",
doi = "10.1109/ISCCSP.2012.6217839",
language = "English (US)",
isbn = "9781467302760",
booktitle = "5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012",

}

TY - GEN

T1 - How will demand response aggregators affect electricity markets? A Cournot game analysis

AU - Chen, Chen

AU - Kishore, Shalinee

AU - Wang, Zhifang

AU - Alizadeh, Mahnoosh

AU - Scaglione, Anna

PY - 2012

Y1 - 2012

N2 - The future electricity grid will include greater and more sophisticated demand side participation. Favored by recent rulings by the Federal Energy Regulatory Commission (FERC), Demand Response (DR) aggregators can combine load requests from a large consumer base and provide load modifications that will be compensated in the wholesale electricity market at the market price. This paper examines the market effects of including Green Energy Management System (GEMS), a future Demand Response (DR) program that will take advantage of operational flexibility of certain types of loads to shape demand profile. Adopting a Cournot game model, we give equilibrium analysis of wholesale electricity market incorporating GEMS as a DR aggregator. The players in the game include traditional generators, the GEMS, and the Independent System Operator (ISO). We provide generalized forms of the optimality conditions for each of these players and show that under certain conditions, the market equilibrium exists and is unique. Our numerical results indicate that the inclusion of GEMS within the power network reduces the average market price of electricity and saves money for customers.

AB - The future electricity grid will include greater and more sophisticated demand side participation. Favored by recent rulings by the Federal Energy Regulatory Commission (FERC), Demand Response (DR) aggregators can combine load requests from a large consumer base and provide load modifications that will be compensated in the wholesale electricity market at the market price. This paper examines the market effects of including Green Energy Management System (GEMS), a future Demand Response (DR) program that will take advantage of operational flexibility of certain types of loads to shape demand profile. Adopting a Cournot game model, we give equilibrium analysis of wholesale electricity market incorporating GEMS as a DR aggregator. The players in the game include traditional generators, the GEMS, and the Independent System Operator (ISO). We provide generalized forms of the optimality conditions for each of these players and show that under certain conditions, the market equilibrium exists and is unique. Our numerical results indicate that the inclusion of GEMS within the power network reduces the average market price of electricity and saves money for customers.

UR - http://www.scopus.com/inward/record.url?scp=84864119981&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84864119981&partnerID=8YFLogxK

U2 - 10.1109/ISCCSP.2012.6217839

DO - 10.1109/ISCCSP.2012.6217839

M3 - Conference contribution

SN - 9781467302760

BT - 5th International Symposium on Communications Control and Signal Processing, ISCCSP 2012

ER -