Economic potential for future demand response in Germany – Modeling approach and case study. (15th January 2016)

• Record Type: Journal Article
• Authors: Gils, Hans Christian
• Is Part Of: Applied energy. Volume 162(2016)
• Page Start: 401
• Page End: 415
• Publication Date: 2016-01-15
• Subjects: Demand response -- Energy system modeling -- Load balancing -- Demand side management -- Renewable energy; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2015.10.083
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: A novel demand response (DR) representation in an energy system model is introduced. The method can be transferred to any such model using simple linear optimization. The economic DR potential in Germany is assessed for a renewable energy scenario. Results show that DR can economically substitute up to 10 GW of power plants. DR furthermore affects renewable energy curtailment and power plant operation. Abstract: The activation of demand response (DR) potentials offered by electricity consumer flexibility is one promising option for providing balancing power and energy in supply systems with high share of variable renewable energy (VRE) power generation. In this paper, a model-based assessment of the economic DR potential in Germany is presented. It relies on the extension of the REMix energy system model by flexible electric loads. In a case study considering a future German power supply system with a VRE share of 70%, possible cost reductions achieved by investment in DR are quantified. The sensitivity of the results to changes in the assumed DR costs and characteristics are analyzed in additional simulations. The results show that the major benefit of employing DR is its ability to substitute peak power generation capacity, whereas the impact on the integration of VRE power generation is lower. This implies that the focus of DR is on the provision of power, not energy. Even at rather pessimistic cost DR assumptions, more than 5 GW of power plant capacity can be substituted. Consumer flexibility furthermore triggers an increase in the operation of back-up power plants, whereas it decreases the utilization of pumped storage hydro stations. In the model results, the reductions in annual power supply costs achieved by DR add up to several hundreds of millions of Euros.