Demand-side view of electricity markets

TLDR

This tutorial paper discusses electricity markets from a demand‑side perspective and notes that increasing price elasticity is not easy. The paper argues that raising short‑run price elasticity of demand for electricity would improve market operation. It outlines tools for consumers and retailers to participate more actively and effectively, including consumer involvement in power system security.

Abstract

This tutorial paper discusses some aspects of electricity markets from the perspective of the demand-side. It argues that increasing the short-run price elasticity of the demand for electrical energy would improve the operation of these markets. It shows, however, that enhancing this elasticity is not an easy task. The tools that consumers and retailers of electrical energy need to participate more actively and effectively in electricity markets are discussed. The paper also describes how consumers of electricity can take part in the provision of power system security.