Costs of Integrating demand response Systems in electricity Markets

As a consequence of an increasing share of renewable energies, balancing electricity production and delivery requires efficient electricity markets. At the heart of electricity markets are Information Systems (IS) that coordinate demand and supply in real-time. IS has recently opened up an alternative towards increasing the efficiency of electricity markets by managing demand side resources; i. e. shifting electricity demand according to fluctuating supply by so-called Demand Response. This paper analyzes Information Systems that integrate Demand Response into electricity markets, with a focus on both the associated costs and benefits. Using historic data from 2011, we compare profits of electricity retailers across three different usage scenarios to determine that load shifting provides the highest revenue: annual IS-related costs account for e2.58 M exceeded by savings of e3.36 M.