Bid-in Price-Sensitive Load: A Comparison with Fixed Load in a Realistic Test System

Bulk power systems operations, in both simulation and practice, are often built on the principle of minimizing production costs, which assumes to first order that demand is fixed and that the only degrees of freedom for balancing generation and load are supply-side unit commitment and dispatch decisions. The purpose of this report is to interrogate the value of welfare-maximizing markets that not only physically balance demand and supply but also ensure that market outcomes provide consumer value by directly maximizing welfare, defined as the value of consumption minus production costs.