Supply and demand for electrical energy in deregulated markets

Procuring adequate supply and balancing demand and supply has become a concern in light of the recent events. It is increasingly believed that demand reduction has an important role to play in balancing supply and demand. This is evidenced by solicitations by system operators (SO) for price responsive loads. There are several variants of such load reduction strategies. Generally, the loads are paid a certain price for reducing demand either through curtailment or through self-generation when called on by the central operator. Another example of this is that of tiered rates-heavy users having to pay morel While the assurance of sufficient supply and control of demand both play an important role in achieving sufficiency, the author restricts this discussion to that of supply. Consequently, he first discusses how sufficiency was assured in the "old-world," and examines methods by which one can assure sufficiency in the deregulated world. In order to examine the latter point, he examines some recent events, market forces and forward markets.