Optimizing the economics of demand response
Right now, energy generators sell their electricity to grid operators in a competitive energy market. Grid operators also oversee a parallel “demand response” procurement program, where big energy consumers like steel plants and pulp and paper mills offer to curb their electricity use during peak time — for a price
This can take a lot of pressure off the electricity grid. It also saves money by reducing the need for the most expensive forms of electricity generation. But according to WISE researcher Jessie Ma and her Toronto Metropolitan University colleague Bala Venkatesh, the current procurement practices create economic inefficiencies.