Can electricity demand response replace hedging?
How will greater use of demand response affect risk managers in the power sector? Pauline McCallion asks the experts
Encouraging customers to cut their power usage in response to spikes in price or load – an increasing trend in the US – could have a huge impact on the role of energy risk managers, which would potentially reduce hedging requirements, lessen the need to invest in underused peaking plants and help to further integrate variable energy resources.
The Federal Energy Regulatory Commission (FERC) defines demand response as, “Changes in electric usage by end-use customers from their normal consumption
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