Mass Market Demand Response Management for the Smart Grid

The increasing complexity of the electricity industry requires the need to better understand and manage diverse resources like renewable energy sources (RES), such as solar and wind energy, renewable hydroelectricity, demand response (DR), energy storage resources (ESR) and distributed energy resources (DERs). The "smart grid" is all about better information and communication and the ability to make wise decisions about energy usage at both micro and macro levels. An approach is emerging where we can moderate the collective ramping behavior of large populations of devices by use of stochastic control techniques. The development and demonstration of this approach, which is a type of priority service pricing, is the focus of this chapter. The chapter provides an overview of the proposed distributed computing‐based methodology and addresses the challenging problem of integrating the ColorPower methodology with energy markets. It also presents the problems of current integration methods and a new methodology for integrating the DR capacity into wholesale energy markets.