ASSESSING LONG-TERM EFFECTS OF DEMAND RESPONSE POLICIES IN WHOLESALE ELECTRICITY MARKETS

06-05-2014 -  Mauricio CEPEDA and Marcelo SAGUAN

Télécharger le pdf
Power grid Dispatching Network Hydro Plant

Key words: demand response, generation investment, market design, wholesale electricity markets.

Abstract:

This paper deals with the practical problems related to long-term issues in electricity markets in the presence of demand response development. Different policies have been implemented around the world aiming to develop demand response potential. Externalities, in particular the CO2 externality, have been one of the key elements in the debate on the effectiveness of different policies regarding demand response development. Policy makers have several options to deal with this externality. The most direct one is to correct the externality by setting a CO2 price at a level that corresponds to the cost to society of the corresponding CO2 emissions. One alternative solution could be to subsidize carbon-free technologies as demand response. In this paper we examine potential long-term impacts of these two policies. We rely on a long-term market simulation model that characterizes expansion decisions in a competitive regime. We test for each policy two different scenarios regarding the possibility of internalization of the CO2 externality. The results show that differences in development policies affect both investments and social costs in the wholesale electricity market and confirm previous findings that a market-driven development of demand response with the internalization of the CO2 externality is the most efficient approach.

Les Publications dans des revues à comité de lecture

PRICE COMPUTATION IN ELECTRICITY AUCTIONS WITH COMPLEX RULES: AN ANALYSIS OF INVESTMENT SIGNALS
par Miguel VASQUEZ et al.
le 25-04-2017

INVESTMENT WITH INCOMPLETE MARKETS FOR RISK: THE NEED FOR LONG-TERM CONTRACTS
par Andreas EHRENMANN et al.
le 25-04-2017

TALES OF TWO ISLANDS – LESSONS FOR EU ENERGY POLICY FROM ELECTRICITY MARKET REFORMS IN BRITAIN AND IRELAND
par David NEWBERY
le 25-04-2017

RATIONALES FOR CAPACITY REMUNERATION MECHANISMS: SECURITY OF SUPPLY EXTERNALITIES AND ASYMMETRIC INVESTMENT INCENTIVES
par Jan Horst KEPPLER
le 19-04-2017

THE ROLE OF CONTINUOUS INTRADAY ELECTRICITY MARKETS: THE INTEGRATION OF LARGE-SHARE WIND POWER GENERATION IN DENMARK
par Fatih KARANFIL and Yuanjing LI
le 11-04-2017

ADAPTING ELECTRICITY MARKETS TO DECARBONISATION AND SECURITY OF SUPPLY OBJECTIVES: TOWARD A HYBRID REGIME?
par Fabien ROQUES and Dominique FINON
le 10-04-2017

SPECIAL SECTION: TOWARDS HYBRID MARKET REGIMES IN THE POWER SECTOR
par Dominique FINON, Jan Horst KEPPLER and Fabien ROQUES
le 10-04-2017

STOPPER LA DÉROUTE DES ÉLECTRICIENS EUROPÉENS : POUR UNE RÉFORME DU MARCHÉ DES QUOTAS DE CO2
par Jan Horst KEPPLER
le 20-02-2017

AN ANALYTICAL APPROACH TO ACTIVATING DEMAND ELASTICITY WITH A DEMAND RESPONSE MECHANISM
par Cédric CLASTRES and Haikel KHALFALLAH
le 10-03-2016

THE IMPACTS OF VARIABLE RENEWABLE PRODUCTION AND MARKET COUPLING ON THE CONVERGENCE OF FRENCH AND GERMAN ELECTRICITY PRICES
par Jan Horst KEPPLER, Sébastien PHAN and Yannick LE PEN
le 10-03-2016

CARBON PRICE INSTEAD OF SUPPORT SCHEMES: WIND POWER INVESTMENTS BY THE ELECTRICITY MARKET
par Marie PETITET, Dominique FINON and Tanguy JANSSEN
le 10-03-2016

LE BESOIN DE MARCHÉS DE LA FLEXIBILITÉ : L’ADAPTATION DU DESIGN DES MARCHÉS ÉLECTRIQUES AUX PRODUCTIONS D’ÉNERGIES RENOUVELABLES
par Dominique FINON
le 04-12-2015

HEDGING STRATEGIES IN ENERGY MARKETS: THE CASE OF ELECTRICITY RETAILERS
par Raphaël Homayoun BOROUMAND, Stéphane GOUTTE, Simon PORCHER and Thomas PORCHER
le 04-12-2015

ASSESSING LONG-TERM EFFECTS OF DEMAND RESPONSE POLICIES IN WHOLESALE ELECTRICITY MARKETS
par Mauricio CEPEDA and Marcelo SAGUAN
le 04-12-2015

Membres Log in