f01d1b6e_ns__Information__and_Decisions__Title
[Date] September 17, 2012 [Presenter] Kaitlin Daniels [Title] 
Demand Response in Energy Markets In response to the disconnect between energy consumption and supply, demand response programs have arisen to provide energy consumers a mechanism by which to respond to market prices. Among these programs are load curtailment contracts, which allow forgone energy consumption to be sold on the market during peak demand events. The existing literature in this area focuses on involuntary curtailment contracts, under which consumers relinquish control of their energy consumption in return for payment. This paper expands the scope of this literature to include voluntary curtailment contracts, which allow consumers to decide whether to reduce their load during each peak event. We solve for the optimal voluntary contract and demonstrate under which regimes the voluntary contract outperforms the involuntary alternative. We find that the voluntary contract is robust to large spreads in load reduction cost (the opportunity cost of reducing consumption experienced by the consumer) and high market demand. We conclude that the voluntary contract is more appropriate when targeting a large pool of commercial and industrial consumers.
Seminars / Conferences - Operations, Information, and Decisions
Title