312 Demand and Response in Smart Grid
are paid for their availability to participate, even if the utility does not
call for a reduction in consumption.
5. Capacity Market Programs. Customers commit to providing pre-
specified load reductions when system contingencies arise. In exchange
for being obligated to curtail load when directed, participants receive
guaranteed rewards. Customers also face penalties for failure to curtail
when called upon to do so. Capacity market programs can be viewed
as a form of insurance, i.e., in some years load curtailments will not
be called, but participants are still paid in order to be on call at any
hour [17].
6. Ancillary Services Market Programs [10]. Customers bid a load curtail-
ment in their transmission network ...