Avoided cost estimation and cost-effectiveness of permanent load shifting in California

P. Sreedharan, D. Miller, S. Price, Chi-Keung WOO*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    34 Citations (Scopus)


    Two intersecting events of the last two decades have transformed the electricity industry: (1) market restructure designed to introduce wholesale market competition; and (2) renewable energy development fostered by government policies, including renewable portfolio standards (RPS). There is, however, little research to answer the question: what is the avoided cost of demand response (DR) in a restructured market with RPS? This paper offers an answer to this question, which is critical for determining the cost-effectiveness of DR and its program design and implementation. We illustrate the answer's usefulness with five real-world examples of permanent load shifting (PLS) in California. These examples show that a PLS system's cost-effectiveness depends on its site-specific characteristics, including location, installation cost and performance, thus affirming the use of a targeted approach to DR design and implementation.

    Original languageEnglish
    Pages (from-to)115-121
    Number of pages7
    JournalApplied Energy
    Publication statusPublished - Aug 2012

    Scopus Subject Areas

    • Building and Construction
    • Energy(all)
    • Mechanical Engineering
    • Management, Monitoring, Policy and Law

    User-Defined Keywords

    • Avoided cost
    • Cost-effectiveness
    • Permanent load shifting
    • Renewable portfolio standards


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