An R&D agenda to enhance electricity system reliability by increasing customer participation in emerging competitive markets

Recent electricity price spikes are painful reminders of the value that meaningful demand-side responses could bring to the restructuring of the US electricity system. A review of the aggregate offers made by suppliers confirms that even a modest increase in demand elasticity could dramatically reduce these extremes in price volatility. In this paper, the authors submit that dramatically increased customer participation in these markets to enhance power 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.