ESD Dissertation Defense – Jason Black

Integrating Demand into the United States Electricity system: Technical, Economic, and Regulatory design for Responsive / Adaptive Load

Abstract:
The current electric power system in the US developed with the assumption of exogenous, inelastic demand. The resulting evolution of the power system reinforced this basic assumption as nearly all controls, monitors, and feedbacks were implemented on the supply side of the system. Flat rate, averaged pricing was a natural extension of the assumption of exogenous demand and also reinforced this condition. As a result, the market designs and physical control of the system exclude active participation from the demand side. Advances in information and communications technologies make it possible today for cost effective integration of demand response. Integrating demand into the US electricity system will allow the development of a more market and has the potential for large efficiency gains. Without feedbacks between supply and demand, attempts to develop competitive markets for electricity will suffer from a greater potential for market power and failure. This thesis provides an analysis of the technical, regulatory, and market issues to determine a system structure that provides incentives for demand response. An integrated, dynamic simulation model is utilized to demonstrate the effects of large scale adoption of demand response technologies. The model includes distributed decision making by both consumers and investors in generation capacity, the effects of their decisions on market prices, and the feedbacks between them. Simulations of large scale adoption of demand response technology are conducted in order to quantify the potential benefits of making demand an active participant in the electric power system. This thesis develops a framework for constructing the feedbacks necessary for creating electric power systems with endogenous demand.

Committee Chair:
M. Ilic

Committee Members:
D. Marks, J. Sterman, I. Vogelsang