The Dynamics of Wholesale and Distributed Energy Markets

Authored by: Eric Woychik , Hong Chen , Dave Erickson

Smart Grids

Print publication date:  December  2017
Online publication date:  November  2017

Print ISBN: 9781498799553
eBook ISBN: 9781351228480
Adobe ISBN:


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Decades ago, the basic idea behind wholesale electricity markets was to allow large-scale generators to have open, nondiscriminatory access to high-voltage transmission in order to sell power at competitive prices. The use of open-access high-voltage transmission, thus, defines the context for competitive wholesale markets. The smart grid ensures access to wholesale markets, which are important to monetize and make economic decisions for energy resources. Wholesale markets now include demand-side management (demand response, DR) and other forms of smart grid energy resources beyond large, central station generators. Still, wholesale electricity markets are but one part of the value chain to fully integrate smart grid resources. Retail and distributed energy markets are also critical to enable energy resources to be monetized and fully used on the distribution grid. Integration and optimization of all energy resources should be achieved across both wholesale and retail markets in order to capture the full value and all related costs for the transmission grid, distribution network, and customers, including distributed energy resources (DERs).

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