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Comparing individual and coordinated demand response with dynamic and static power grid tariffs

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  • Backe, Stian
  • Kara, Güray
  • Tomasgard, Asgeir

Abstract

This paper investigates cost-optimal operation of flexible electricity assets with a capacity-based power grid tariff involving power subscription. The purpose of this research is to identify the characteristics of a subscribed capacity-based tariff that promotes efficient network development through demand response. Using historical load data, we compare two consumers with flexible assets being billed by their individual load versus their combined and coordinated loads in a two-stage stochastic program. The frequency of adjusting the subscribed capacity level (weekly versus annually) influences the effectiveness of the tariff in terms of reducing loads that dimension the grid. The results show that weekly subscription on average provides 5−6% cost savings, while annual subscription on average provides 3% cost savings. A combined annual peak load reduction of 15% occurs when the combined subscription level is adjusted weekly. We also find that when the subscription level is adjusted weekly, the load reduction is cost efficient even when capacity is not scarce, which ought to be avoided. Depending on where a bottleneck in the grid is located, the price signal should be based on the combined load of several consumers rather than individual loads if combined peak load shaving is to be cost-optimal.

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  • Backe, Stian & Kara, Güray & Tomasgard, Asgeir, 2020. "Comparing individual and coordinated demand response with dynamic and static power grid tariffs," Energy, Elsevier, vol. 201(C).
    • Handle: RePEc:eee:energy:v:201:y:2020:i:c:s036054422030726x
    DOI: 10.1016/j.energy.2020.117619
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    3. Qiu, Yueming Lucy & Wang, Yi David & Iseki, Hiroyuki & Shen, Xingchi & Xing, Bo & Zhang, Huiming, 2022. "Empirical grid impact of in-home electric vehicle charging differs from predictions," Resource and Energy Economics, Elsevier, vol. 67(C).
    4. Bjarghov, Sigurd & Farahmand, Hossein & Doorman, Gerard, 2022. "Capacity subscription grid tariff efficiency and the impact of uncertainty on the subscribed level," Energy Policy, Elsevier, vol. 165(C).
    5. Backe, Stian & Zwickl-Bernhard, Sebastian & Schwabeneder, Daniel & Auer, Hans & Korpås, Magnus & Tomasgard, Asgeir, 2022. "Impact of energy communities on the European electricity and heating system decarbonization pathway: Comparing local and global flexibility responses," Applied Energy, Elsevier, vol. 323(C).
    6. Li, Ruimeng & Yang, Naiding & Yi, Hao & Jin, Na, 2023. "The robustness of complex product development projects under design change risk propagation with gray attack information," Reliability Engineering and System Safety, Elsevier, vol. 235(C).
    7. Clift, Dean Holland & Stanley, Cameron & Hasan, Kazi N. & Rosengarten, Gary, 2023. "Assessment of advanced demand response value streams for water heaters in renewable-rich electricity markets," Energy, Elsevier, vol. 267(C).
    8. Foslie, Sverre Stefanussen & Knudsen, Brage Rugstad & Korpås, Magnus, 2023. "Integrated design and operational optimization of energy systems in dairies," Energy, Elsevier, vol. 281(C).
    9. Sigurd Bjarghov & Hossein Farahmand & Gerard Doorman, 2021. "Grid Tariffs Based on Capacity Subscription: Multi Year Analysis on Metered Consumer Data," Papers 2111.06253, arXiv.org.

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