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NYISO Price-Responsive Load Program Evaluation

How have markets performed in eliciting demand response? Is the response sufficient to improve market performance? If not, what else is needed? CERTS is addressing these questions, in partnership with key stakeholders, by conducting market assessments of selected demand-response programs targeted to medium and large commercial and industrial customers. The objective is to evaluate key technologies that enable demand response; identify "best practices" among program administrators, contractors/aggregators, and end users; and analyze the technical, market, and institutional barriers that affect how widespread participation by large customer loads is likely to be in key regional electricity markets.

NYISO, in conjunction with the New York Public Service Commission, the New York State Energy Research and Development Authority, and regulated and unregulated load-serving entities and retail service providers, has implemented two large statewide demand-response programs. In partnership with these parties, CERTS is evaluating the effect that enabling technology has on customer demand reduction.

In New York's Day-Ahead Demand Response Program, customers or aggregators offer loads into the New York ISO's day-ahead market (upper curve). Depending on the prices offered, some of the loads get scheduled to displace generation (lower curve).

Figure 1. In New York's Day-Ahead Demand Response Program, customers or aggregators offer loads into the New York ISO's day-ahead market (upper curve). Depending on the prices offered, some of the loads get scheduled to displace generation (lower curve).

Wholesale markets today serve inelastic (vertical) demands with increasingly expensive generation.

Figure 2. Wholesale markets today serve inelastic (vertical) demands with increasingly expensive generation.

Increasing demand elasticity lowers the cost of meeting loads, reduces frequency of high price spikes, and reduces ability of generators to exert market power.

Figure 3. Increasing demand elasticity lowers the cost of meeting loads, reduces frequency of high price spikes, and reduces ability of generators to exert market power.

The analysis and results from these studies are being used to: identify major technical, market, and institutional barriers that inhibit widespread participation by different types of commercial and industrial customers in emergency and economic demand-response programs; prioritize additional R&D activities that could accelerate development of enabling technologies; and identify key issues that policymakers need to address to facilitate the long-run sustainability of demand-response service and technology providers.

Contact:

Charles Goldman
Lawrence Berkeley National Laboratory
(510) 486-4637

http://certs.lbl.gov