On the market effects of queueing energy requests as an alternative to storing electricity

In the near future, our society will face an inevitable transition from consuming fossil fuels to renewable resources like wind and solar energy. It is mainly envisioned that this shift can happen through a widespread deployment of energy storage devices, clean generation reserves, or by making the demand for electricity more price elastic than what is practiced in the current operational framework. Measures that are employed to make the demand become more elastic are referred to as Demand Response and Demand Side Management. This paper assesses the benefits of adding large reservoirs of schedulable demand on the electricity market and how this can 1) help reduce peak demand; 2) reduce wholesale electricity prices; and 3) enable wide-scale integration of renewables into the electricity generation pool. This demand modification is achieved through buffering energy requests from certain controllable appliances participating in a voluntary Demand Side Management program offered by a utility/aggregator, which we call Digital Direct Load Scheduling. Here, we will mainly focus on proposing a framework through which these reservoirs can be integrated into the wholesale electricity market.