The comparative economic assessment of the impacts of energy storage and demand response resource participation in the day-ahead electricity markets
type: CreativeWork
description: Electricity is the prototypical just-in-time product due to the limited means to economically store it on a large-scale basis. As such, electricity must be consumed as soon as it is produced. In areas of the U.S. grid with competitive electricity markets, independent system operators (ISOs) run day-ahead electricity markets (DAMs) to determine which resources will meet the demand and ensure adequate capacity is committed so that the supply-demand balance can be met around the clock. System operators have met the demand by controlling the output of the supply-side resources, namely generators, since there is a limited amount of gridscale energy storage (ES) in operation today and little participation from the demand-side in meeting the supply-demand balance. The reliance on supply-side resources to maintain the supply-demand balance results, at times, in high prices, marked price volatility, and even price spikes. These price issues, along with advances in storage and communication technology, have reinvigorated the drive of policymakers, system planners and operators, private investors and other electricity grid stakeholders to expand the utilization of ES and demand response (DR) resources to reliably and effectively meet the supply-demand balance. ES and DR resources provide the ISO with additional degrees of freedom in meeting the supply-demand balance by enabling electricity to be stored and shifted from peak load hours to lower load hours, which may decrease the operational costs and improve system reliability. We know of no work which has studied the economic impacts of integrated DR and ES resources in depth. Consequently, there is a limited understanding among electricity grid stakeholders of the economic impacts of deepening ES and DR resource penetrations on the DAMs. To develop operational and planning strategies which are effective and policies which incentivize appropriate penetrations of ES and DR resources, grid stakeholders need to understand these i…
abstract: Electricity is the prototypical just-in-time product due to the limited means to economically store it on a large-scale basis. As such, electricity must be consumed as soon as it is produced. In areas of the U.S. grid with competitive electricity markets, independent system operators (ISOs) run day-ahead electricity markets (DAMs) to determine which resources will meet the demand and ensure adequate capacity is committed so that the supply-demand balance can be met around the clock. System operators have met the demand by controlling the output of the supply-side resources, namely generators, since there is a limited amount of gridscale energy storage (ES) in operation today and little participation from the demand-side in meeting the supply-demand balance. The reliance on supply-side resources to maintain the supply-demand balance results, at times, in high prices, marked price volatility, and even price spikes. These price issues, along with advances in storage and communication technology, have reinvigorated the drive of policymakers, system planners and operators, private investors and other electricity grid stakeholders to expand the utilization of ES and demand response (DR) resources to reliably and effectively meet the supply-demand balance. ES and DR resources provide the ISO with additional degrees of freedom in meeting the supply-demand balance by enabling electricity to be stored and shifted from peak load hours to lower load hours, which may decrease the operational costs and improve system reliability. We know of no work which has studied the economic impacts of integrated DR and ES resources in depth. Consequently, there is a limited understanding among electricity grid stakeholders of the economic impacts of deepening ES and DR resource penetrations on the DAMs. To develop operational and planning strategies which are effective and policies which incentivize appropriate penetrations of ES and DR resources, grid stakeholders need to understand these i…
author: Van Horn, Kai
language: en
keywords: demand response, energy storage, electricity markets, market simulation
date published: 2013-02-03T19:37:29Z
date modified: 2026-07-22T22:25:33Z
provider: University of Illinois - Urbana-Champaign
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Illinois at Urbana-Champaign

PropertyValue
property ID: Handle
value: http://hdl.handle.net/2142/42403