A review of demand response business cases

Demand Response (DR) is widely held to be an essential part of future power systems. DR is expected to support integration of distributed generation from Renewable Energy Sources (RES) as well as to facilitate demand-side participation in power and ancillary service markets. This paper critically analyzes several business models from both a Distribution System Operator (DSO) and retailer perspective, and identifies opportunity costs associated with the trade-off between demand flexibility and energy acquisition cost. Numerical results from previous studies are gathered and compared to the control and communication complexity. Finally, regulatory issues are reviewed.