Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications. (September 2016)

• Record Type: Journal Article
• Authors: Feuerriegel, Stefan; Neumann, Dirk
• Is Part Of: Energy policy. Volume 96(2016)
• Page Start: 231
• Page End: 240
• Publication Date: 2016-09
• Subjects: Demand Response -- Load shifting -- Economic potential -- Policy implications -- Optimization; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2016.05.050
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: Demand Response allows for the management of demand side resources in real-time; i.e. shifting electricity demand according to fluctuating supply. When integrated into electricity markets, Demand Response can be used for load shifting and as a replacement for both control reserve and balancing energy. These three usage scenarios are compared based on historic German data from 2011 to determine that load shifting provides the highest benefit: its annual financial savings accumulate to €3.110 M for both households and the service sector. This equals to relative savings of 2.83% compared to a scenario without load shifting. To improve Demand Response integration, the proposed model suggests policy implications: reducing bid sizes, delivery periods and the time-lag between market transactions and delivery dates in electricity markets. Abstract : Highlights: Comparison of 3 scenarios to integrate Demand Response into electricity markets. These are: optimize procurement, offer as control reserve, avoid balancing energy. Ex post simulation to quantify financial impact and policy implications. Highest savings from load shifting with a cost reduction of 3%. Model suggests reducing bid sizes, delivery periods and time lags as policy issues.