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Demand response, market design and risk: A literature review

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  • Sousa, Joana
  • Soares, Isabel

Abstract

Different market designs may create distortions on spot pricing equilibrium, thus providing different signals for market agents and investment decisions on new generation assets. Also, demand flexibility market value may differ according to market characteristics. This paper aims to study the demand response (DR) – market design – risk nexus. According to our findings, despite the design differences among MIBEL, EEX and Nord Pool, some variables are common to all while those associated with risk premia might differ. This is due to the mismatch between the specific market structure characteristics and premises, particularly in what concerns the supply generation portfolio composition in the day-ahead markets.

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  • Sousa, Joana & Soares, Isabel, 2020. "Demand response, market design and risk: A literature review," Utilities Policy, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:juipol:v:66:y:2020:i:c:s0957178720300783
    DOI: 10.1016/j.jup.2020.101083
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    Cited by:

    1. Lyu, Chenyan & Do, Hung Xuan & Nepal, Rabindra & Jamasb, Tooraj, 2024. "Volatility spillovers and carbon price in the Nordic wholesale electricity markets," Energy Economics, Elsevier, vol. 134(C).
    2. Pereira, Diogo Santos & Marques, António Cardoso, 2022. "An analysis of the interactions between daily electricity demand levels in France," Utilities Policy, Elsevier, vol. 76(C).
    3. Sousa, Joana & Soares, Isabel, 2023. "Benefits and barriers concerning demand response stakeholder value chain: A systematic literature review," Energy, Elsevier, vol. 280(C).
    4. Sousa, Joana & Soares, Isabel, 2022. "Demand response potential: An economic analysis for MIBEL and EEX," Energy, Elsevier, vol. 244(PA).
    5. Erik Heilmann & Nikolai Klempp & Kai Hufendiek & Heike Wetzel, 2022. "Long-term Contracts for Network-supportive Flexibility in Local Flexibility Markets," MAGKS Papers on Economics 202224, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Sirin, Selahattin Murat & Camadan, Ercument & Erten, Ibrahim Etem & Zhang, Alex Hongliang, 2023. "Market failure or politics? Understanding the motives behind regulatory actions to address surging electricity prices," Energy Policy, Elsevier, vol. 180(C).
    7. Hacopian Dolatabadi, Sarineh & Latify, Mohammad Amin & Karshenas, Hamidreza & Sharifi, Alimorad, 2024. "Demand response mechanisms: A new debate on internalizing power generation sector negative technical spillovers," Energy, Elsevier, vol. 301(C).
    8. Saebi, Javad & Ghasemi, Abolfazl & Hojjat, Mehrdad, 2022. "Design and implementation of a competitive framework for a day-ahead demand-response program in Iran," Utilities Policy, Elsevier, vol. 77(C).

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