  The intermittent nature of renewable energy resources creates extra
challenges in the operation and control of the electricity grid. Demand
flexibility markets can help in dealing with these challenges by introducing
incentives for customers to modify their demand. Market-based demand-side
management (DSM) have garnered serious attention lately due to its promising
capability of maintaining the balance between supply and demand, while also
keeping customer satisfaction at its highest levels. Many researchers have
proposed using concepts from mechanism design theory in their approaches to
market-based DSM. In this work, we provide a review of the advances in
market-based DSM using mechanism design. We provide a categorisation of the
reviewed literature and evaluate the strengths and weaknesses of each design
criteria. We also study the utility function formulations used in the reviewed
literature and provide a critique of the proposed indirect mechanisms. We show
that despite the extensiveness of the literature on this subject, there remains
concerns and challenges that should be addressed for the realistic
implementation of such DSM approaches. We draw conclusions from our review and
discuss possible future research directions.
