The introduction of intermittent energy resources calls for the ability to modulate consumption patterns according to electricity availability. This paper provides a brief overview of the main electricity market design characteristics and places demand response within the framework of the existing timeline of market operation. The main differences between electricity markets lie in the price formation mechanisms where some markets pay-as- cleared and some pay- as- bid for the electricity transacted. The geographical area for which a price is determined also varies across markets, some determine a single price for an entire region and others opt for a price according to location or grid nodes. Differences between markets are also found in the procurement methods, be it bilateral contracting, or through a centralized platform such as an exchange or electricity pool for different time periods. Demand response can be introduced during either the bidding and contracting process as a special ‘supplier’, as a reserve mechanism, or separate from the market. Demand response is activated by the market depending on the desired objective, such as peak generator displacement, congestion relief, energy efficiency, renewable energy exploitation or cost savings.
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