Tuesday, May 1, 2012

Implications of FERC Order 745 “Demand Response Compensation in Organized Wholesale Energy Market"

Much literature has focused on FERC order 745. Here are some insights on how this ruling will affect DR customers and aggregators.  


Although there are no firm size restraints mandated by the rule, other constraints make it difficult for, say a small residential consumer to participate directly in this large market. This is because,to participate in a wholesale market and become a recognized Load Serving Entity (LSE), one needs to demonstrate credit worthiness (usually by having a large sum of money in the bank), meet certain technical standards (telemetry, energy management systems, software to bid, etc) and any other requirements specific to that market.These factors make it so that aggregators have a much easier participating than would a normal end user of energy.  However, large industrial or commercial users of electricity with energy managers and sophisticated systems may choose to directly participate themselves outside of aggregator programs.

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