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Article Dans Une Revue Economic Analysis and Policy Année : 2015

Which electricity market design to encourage the development of demand response?

Résumé

Demand response is a cornerstone problem in electricity markets under climate change constraints. Most liberalized electricity markets have a poor track record at encouraging the deployment of smart meters and the development of demand response. In Europe, different models are considered for demand response, from a development under a regulated regime to a development under competitive perspectives. In this paper focusing on demand response and smart metering for mid-­‐size and small consumers, we investigate which types of market signals should be sent to demand managers to see demand response emerge as a competitive activity. Using data from the French power system over nine years , we compare the possible market design options which would enable the development of demand response. Our simulations demonstrate that under the current market rules demand response is not a profitable activity in the French electricity industry. Introducing a capacity market could bring additional revenues to demand response providers and improve incentives to put in place demand response programs in a market environment.
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Dates et versions

hal-01286331 , version 1 (10-03-2016)

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Vincent Rious, Yannick Perez, Fabien Roques. Which electricity market design to encourage the development of demand response?. Economic Analysis and Policy, 2015, 48, pp.128-138. ⟨10.1016/j.eap.2015.11.006⟩. ⟨hal-01286331⟩
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