Demand response in the retail market: Benefits and challenges

This paper discusses two types of Demand Response (DR), namely price-based DR and reliability-based DR, in the United States context. The advantages and limitations of each type of DR are reviewed through examining related studies. The paper claims that neither price-based DR nor reliability-based DR can maximize the DR benefit if applied alone. The paper then proposes two hybrid frameworks, in which both price-based and reliability-based programs are integrated into an information management system for both scheduling and dispatch. These frameworks encapsulate different degrees of change and decentralization of the electricity distribution grid.