Assessing the competitiveness of demand-side bidding

摘要

Demand-side bidding (DSB) provides a very flexible way of meetingnthe peak load in a production schedule. This paper demonstrates that, inna competitive electricity pool, DSB and other forms of flexiblengeneration can cause sharp and unwarranted price increases if thenproduction schedule is established on the basis of a minimization of thentotal production cost. Furthermore, the competitiveness of DSB isnartificially inflated if the load recovery periods which accompany thesenload reductions are not taken into consideration by the schedulingnprogram. It is argued that the actual value of DSB should be re-examinednin the light of these findings