Measuring the Benefits of Delayed Price-Responsive Demand in Reducing Wind-Uncertainty Costs

Demand response has benefits in mitigating unit commitment and dispatch costs imposed on power systems by wind uncertainty and variability. We examine the effect of delays in consumers responding to price signals on the benefits of demand response in mitigating wind-uncertainty costs. Using a case study based on the ERCOT power system, we compare the cost of operating the system with forecasts of future wind availability to a best-case scenario with perfect foresight of wind. We demonstrate that wind uncertainty can impose substantive costs on the system and that demand response can eliminate more than 75% of these costs if loads respond to system conditions immediately. Otherwise, we find that with a 30-min lag in the response, nearly 72% of the value of demand response is lost.