In ISO New England’s wholesale electricity markets, demand resources, like power plants and other supply resources, are competitive assets that help meet New England’s electricity needs.
On June 1, 2018, a new price-responsive demand structure went into effect in ISO New England’s marketplace. Learn more:
Instead of generating energy that they can sell, as power plants do, demand resources reduce their consumption of electricity from the regional power system. This reduction is their product—it frees up electricity on the grid that can then be used to serve others.
Demand resources can take many forms. They can be a capacity product, type of equipment, system, service, practice, or strategy—almost anything that verifiably reduces end-use demand for electricity from the power system. (Reductions must be verified using an ISO New England-accepted measurement and verification protocol.) These resources fall into two general types:
ISO New England has had a long commitment to demand resources. Since the ISO’s first programs in 2001, participation by demand resources has grown from just 63 megawatts (MW) to thousands of megawatts. For more on the history of demand resources in New England, see the Price-Responsive Demand (PRD) Overview (slides and webinar recording).
June 1, 2018, marked the completion of a complex, years-long effort to fully integrate active demand resources into the regional wholesale electricity marketplace. With the new Price-Responsive Demand (PRD) framework now in effect, active demand resources are fully part of the energy market and reserve market systems and are dispatched economically based on their energy market offers, just like power plants and other supply resources. Passive demand resources, which are not dispatchable, are ineligible to participate in the energy markets. Both active and passive demand resources have been fully integrated into the Forward Capacity Market since 2010, though the resource type names have changed (more below).
More specifically, under the current PRD framework, active demand resources:
In the FCM, all dispatchable resources receive fully comparable obligations and compensation as other power resources do using the pay-for-performance construct (which also went into effect June 1).
The graphic below illustrates the various ways New England electricity customers can now fully participate in New England’s wholesale electricity markets. Note the hierarchical organization.
With the implementation of PRD, the former Transitional Price-Responsive Demand program for active demand resources, as well as the capacity resource types called real-time demand-response resources (RTDR) and real-time emergency generation resources (RTEG), were terminated.
Visit the Demand Resources page to access related data, information, rules, and procedures.