Demand response control structure in imperfectly competitive power markets: independent or integrated?

Julien Ancel ()
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Julien Ancel: LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, ENPC - École nationale des ponts et chaussées

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Abstract: This article interrogates the effects of different types of actors controlling load-shifting operations and the subsequent market impacts under Cournot competition. Analytical results linking load-shifting capacity and market equilibrium are obtained for independently triggered load-shifting by a regulated, price-taker, or price-maker actor and for an integrated generator. An application to a 2035 French power system with a bottom-up description of demand response constraints is also proposed. This paper has two main results. Firstly, at the initial deployment stages, prices are smoothed and lowered with load-shifting (LS), whatever the control structure of LS is. Secondly, at larger installed LS capacity, we find an ordering of the structures regarding market power exercise. Sorting by increasing market power, regulated pure LS players, private pure players are close ; then LS integrated to peak generation, then uniformly spread across all generators. Integrated LS-base generation induces the most market power through LS capacity withholding.

Keywords: Demand response; Market power; Ownership structure; Flexibility (search for similar items in EconPapers)
Date: 2025-04-10
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