TECHNIQUE FOR AGGREGATING AN ENERGY SERVICE

Embodiments of a system, a method, and a computer-program product (e.g., software) for aggregating an energy service from a number of participants for use by a power-system operator is described. This aggregation may be performed by an aggregator, which is between the participants and the power-system operator. In particular, the aggregator may use an embedded economic mechanism to calculate a price that matches supply (or cutback) of power and/or load from the participants with a desired supply of the power-system operator. Because the aggregator typically does not know the participants' exact propensity to respond as a function of price (supply function), the aggregator calculates the purchase price using one or more iterations in which an initial probe price is provided to the participants, and the participants respond with supply-function approximations that are valid in proximity to the current probe price.