Wholesale Energy Markets: Setting the Right Framework for Price Responsive Demand
10 December 2012
By Amparo Nieto
The implementation of ISO-operated generation bid-based markets in the late 1990s led to greater transparency in opportunity costs of regional energy transactions in the US. However, despite the evolving sophistication of wholesale markets, important design limitations remain. In this article from The Electricity Journal, NERA Senior Consultant Amparo Nieto acknowledges the potential of smart grid technologies for bringing in further market efficiency and system reliability gains. Ms. Nieto provides insight into the key reforms that will be needed at the wholesale level to accomplish that promise, and reviews elements of the specific approach recently adopted by PJM to recognize the expansion of price-responsive demand in its region.
