FRAMEWORK FOR THE INCORPORATION OF DEMAND-SIDE IN A COMPETITIVE ELECTRICITY MARKET

The paper discusses the importance of simultaneous plant production an d demand reduction scheduling which is required for the establishment of a full electricity market where demand-side has opportunity to comp ete with generators, as is the case with the England & Wales Pool's de mand-side bidding (DSB) scheme. It also emphasises that demand cannot be generally treated as negative generation because of the ability of demand to redistribute itself in response to price based load manageme nt activities. In that sense, an adequate scheduling methodology of av ailable resources (from supply and demand-sides) is needed to facilita te the new market. However, traditional formulations of the plant sche duling problem are not valid when load reduction is available, as gros s demand is not known in advance. For that purpose a composite model f or optimal generation and demand reduction scheduling is presented in the paper, It is shown that this model can be used for a comprehensive evaluation of possible scenarios for the implementation of demand-sid e bidding into the electricity market and the assessment of the influe nce of DSB on total production costs, system marginal price (SMP) prof ile, capacity element payments and benefit allocation between producer s and consumers.