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Tim Schittekatte

Topic of the Month

13.11.2017

Assessing distribution network tariff design in a changing context

Written by Tim Schittekatte In this topic of the month, I argue that the ideal distribution network tariff does not exist. The most robust choice for […] read more

Electricity

Alberto's Workshop

Event Highlights

8.11.2017

Demand Participation and Demand Response in Electricity Markets: which way forward?

The ongoing energy transition, with the resulting penetration of renewable energy sources, requires a higher level of flexibility in the electricity markets. Demand, through a […] read more

Electricity

Topic of the Month

30.10.2017

The case for locational pricing

Day-ahead markets in the EU include only a coarse, zonal representation of physical transmission constraints. Sometimes this arrangement is justified on the basis that, for […] read more

Electricityundefined

Topic of the Month

24.10.2017

Why doesn’t the EU co-optimize the procurement of ancillary services with energy?

Written by Ross Baldick The US and the EU have different approaches to the procurement of ancillary services (AS), in particular frequency regulation and contingency […] read more

Electricity

Toulouse School of Economics

23.10.2017

Negative prices for electricity

Written by S. Ambec and C. Crampes (Toulouse School of Economics) When we witness producers paying consumers to offload their power, we can but wonder […] read more

Electricity

Topic of the Month

16.10.2017

Stitching seams with different threads: the EU experience

Written by Ross Baldick Due to the lack of large scale real-time markets, the evolution of the electricity industry in the EU is currently much […] read more

Electricity

Topic of the Month

9.10.2017

Stitching seams with different threads: the US experience

Written by Ross Baldick   Today, the majority of electric energy consumed in the US is served in so-called “organized” or “centralized” markets that are operated […] read more

Electricityundefined

News

21.09.2017

Prof. Baldick (University of Texas) joins FSR

The FSR Energy is glad to welcome Professor Ross Baldick from the University of Texas at Austin. Prof. Baldick is author and co-author of several […] read more

Electricity

Toulouse School of Economics

19.09.2017

The energy transition: Germany’s turning point

Written by Stefan Ambec and Claude Crampes, Toulouse School of Economics On September 24, Germans will vote for the new members of the Bundestag. The […] read more

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Alberto's Workshop

Demand Participation and Demand Response in Electricity Markets: which way forward?

- Electricity

The ongoing energy transition, with the resulting penetration of renewable energy sources, requires a higher level of flexibility in the electricity markets. Demand, through a more active participation in the various electricity markets, is widely recognised as one of the best solutions to provide additional flexibility. If compared with traditional flexibility resources, demand participation is often cheaper and can contribute to lower electricity prices for final customers. Such participation, given the rapid development of smart-metering and ICT solutions, is no longer impeded by technological barriers. However, an enabling regulatory framework and one or more viable business models are needed.

The Florence School of Regulation opened its 2017 – 2018 Regulatory Policy Workshop Series with a full day event on Demand Participation in Electricity Markets and Demand Response: Regulatory Framework and Business Models, on Friday 27th October.

The Workshop, starting from the proposals of the European Commission in the “Clean Energy for all Europeans” Package, attempted to identify the most appropriate regulatory framework and business models that can enable demand participation in markets on non-discriminatory terms.

During the extensive debate it was clear that several critical points must be addressed by the EU, if the Union is serious in promoting the uptake of demand participation and demand response. In particular, implicit demand response requires that final customers can have the possibility to be more directly exposed to dynamic pricing, e.g. via smart meters, short settlement periods and variable prices. Of course, customers not willing to be subjects to the vagaries of the wholesale market should still have the possibility to sign more stable and fixed-price contracts with their energy suppliers. On the other hand, explicit demand response rests on the existence of aggregators that may be independent or not from other actors of the value chain. The nature of such aggregators, their rights and obligations were undoubtedly the most contentious topics. Indeed, on these issues it was not possible to reach a final agreement between the different stakeholders attending the workshop.

A consensus was achieve only on the fact that flexibility from the demand side will be an essential aspect of the electricity markets of the future. For this reason, more market monitoring and cooperation among the companies and the relevant institutions will be necessary.

171027 Demand Participation in Electricity Markets and Demand Response

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