Review of Theoretical Research and Engineering Practice for Demand Response Market Mechanisms and Its Suggestions for China

As a substitute for the traditional generator units, the demand side resources can participate in peak-cutting and valley-filling in the power system by changing their operating power, which is called demand response (DR). The DR market mechanism will play a significant role in guiding power users to actively participate in DR. For a long time in the past, Chinese DR practice mainly relied on administrative methods. These methods have adapted to the monopoly power market environment, but it is difficult to adapt to the current state of the power system reform. Based on this background, this paper first summarizes the widely- used price-based DR market mechanism and incentive-based DR market mechanism. Besides, the point-based market mechanism recently proposed is analysed. Then, based on the theoretical research of the market mechanism, the DR engineering practice in the United States, Europe and China is introduced. The point-based market mechanism practice in Jiangsu Province is focused on. The advantages and disadvantages of each market mechanism are analysed. Finally, according to the current development situation of China’s power market, the suggestions about the DR mechanism are put forward for China.