IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v153y2020icp228-240.html
   My bibliography  Save this article

Methodology for deploying cost-optimum price-based demand side management for residential prosumers

Author

Listed:
  • Venizelou, Venizelos
  • Makrides, George
  • Efthymiou, Venizelos
  • Georghiou, George E.

Abstract

Electricity networks are experiencing increasing congestion and reliability issues as current generation and transmission infrastructures endeavour to match the supply with demand. The integration of intermittent renewable energy resources such as photovoltaic (PV) systems has led to a large variation in energy production and increased supply uncertainty in power systems. In this context, demand-side management (DSM) schemes can be used to motivate prosumers to refine their energy behaviours by offering them various incentives. This study presents a universally-applied methodology that will promote the deployment of effective price-based DSM for residential prosumers. The proposed methodology can be applied on both prosumers and consumers since the utilization of the net-load profile was found to reduce the percentage of unintended revenues by 15%. Additionally, the effectiveness of the methodology was validated through a pilot-network of 300 residential prosumers with installed rooftop PV systems, and resulted in seasonally dependent peak consumption reduction in the range of 1.03% and 3.19% and a reduction of the overall consumption by approximately 2%. Finally, the conducted cost-benefit analysis demonstrated an overall net-benefit of €4.62mln, over a 15-year period, when considering assumptions that are linked to the costs and benefits of a nationwide deployment of the proposed DSM scheme.

Suggested Citation

  • Venizelou, Venizelos & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2020. "Methodology for deploying cost-optimum price-based demand side management for residential prosumers," Renewable Energy, Elsevier, vol. 153(C), pages 228-240.
    • Handle: RePEc:eee:renene:v:153:y:2020:i:c:p:228-240
    DOI: 10.1016/j.renene.2020.02.025
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148120302111
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2020.02.025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.
    2. Chi-Keung Woo & Orans, Ren & Horii, Brian & Peter Chow, 1995. "Pareto-superior time-of-use rate option for industrial firms," Economics Letters, Elsevier, vol. 49(3), pages 267-272, September.
    3. Mostafa Baladi, S. & Herriges, Joseph A. & Sweeney, Thomas J., 1998. "Residential response to voluntary time-of-use electricity rates," Resource and Energy Economics, Elsevier, vol. 20(3), pages 225-244, September.
    4. Rieger, Alexander & Thummert, Robert & Fridgen, Gilbert & Kahlen, Micha & Ketter, Wolfgang, 2016. "Estimating the benefits of cooperation in a residential microgrid: A data-driven approach," Applied Energy, Elsevier, vol. 180(C), pages 130-141.
    5. Kenneth Train & Gil Mehrez, 1994. "Optional Time-of-Use Prices for Electricity: Econometric Analysis of Surplus and Pareto Impacts," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 263-283, Summer.
    6. Filippini, Massimo & Pachauri, Shonali, 2004. "Elasticities of electricity demand in urban Indian households," Energy Policy, Elsevier, vol. 32(3), pages 429-436, February.
    7. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    8. Rasanen, Mika & Ruusunen, Jukka & Hamalainen, Raimo P., 1997. "Optimal tariff design under consumer self-selection," Energy Economics, Elsevier, vol. 19(2), pages 151-167, May.
    9. Patrick, Robert H., 1990. "Rate structure effects and regression parameter instability across time-of-use electricity pricing experiments," Resources and Energy, Elsevier, vol. 12(2), pages 179-195, July.
    10. Matsukawa, Isamu, 2001. "Household Response to Optional Peak-Load Pricing of Electricity," Journal of Regulatory Economics, Springer, vol. 20(3), pages 249-267, November.
    11. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    12. Train, Kenneth E & McFadden, Daniel L & Goett, Andrew A, 1987. "Consumer Attitudes and Voluntary Rate Schedules for Public Utilities," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 383-391, August.
    13. Reiss, Peter C. & White, Matthew W., 2002. "Household Electricity Demand, Revisited," Research Papers 1830, Stanford University, Graduate School of Business.
    14. Woo, C.K. & Li, R. & Shiu, A. & Horowitz, I., 2013. "Residential winter kWh responsiveness under optional time-varying pricing in British Columbia," Applied Energy, Elsevier, vol. 108(C), pages 288-297.
    15. Janet A. Weiss & Mary Tschirhart, 1994. "Public information campaigns as policy instruments," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(1), pages 82-119.
    16. Aigner, Dennis J & Ghali, Khalifa, 1989. "Self-Selection in the Residential Electricity Time-of-Use Pricing Experiments," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 131-144, Supplemen.
    17. Mountain, Dean C. & Lawson, Evelyn L., 1995. "Some initial evidence of Canadian responsiveness to time-of-use electricity rates: Detailed daily and monthly analysis," Resource and Energy Economics, Elsevier, vol. 17(2), pages 189-212, August.
    18. Ahmad Faruqui & Sanem Sergici, 2010. "Household response to dynamic pricing of electricity: a survey of 15 experiments," Journal of Regulatory Economics, Springer, vol. 38(2), pages 193-225, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yerasimos Yerasimou & Marios Kynigos & Venizelos Efthymiou & George E. Georghiou, 2021. "Design of a Smart Nanogrid for Increasing Energy Efficiency of Buildings," Energies, MDPI, vol. 14(12), pages 1-19, June.
    2. Oprea, Simona-Vasilica & Bâra, Adela & Diaconita, Vlad, 2022. "A motivational local trading framework with 2-round auctioning and settlement rules embedded in smart contracts for a small citizen energy community," Renewable Energy, Elsevier, vol. 193(C), pages 225-239.
    3. Vladimir Z. Gjorgievski & Nikolas G. Chatzigeorgiou & Venizelos Venizelou & Georgios C. Christoforidis & George E. Georghiou & Grigoris K. Papagiannis, 2020. "Evaluation of Load Matching Indicators in Residential PV Systems-the Case of Cyprus," Energies, MDPI, vol. 13(8), pages 1-18, April.
    4. Gjorgievski, Vladimir Z. & Cundeva, Snezana & Georghiou, George E., 2021. "Social arrangements, technical designs and impacts of energy communities: A review," Renewable Energy, Elsevier, vol. 169(C), pages 1138-1156.
    5. Carlos Cruz & Esther Palomar & Ignacio Bravo & Alfredo Gardel, 2020. "Cooperative Demand Response Framework for a Smart Community Targeting Renewables: Testbed Implementation and Performance Evaluation," Energies, MDPI, vol. 13(11), pages 1-20, June.
    6. Sana Iqbal & Mohammad Sarfraz & Mohammad Ayyub & Mohd Tariq & Ripon K. Chakrabortty & Michael J. Ryan & Basem Alamri, 2021. "A Comprehensive Review on Residential Demand Side Management Strategies in Smart Grid Environment," Sustainability, MDPI, vol. 13(13), pages 1-23, June.
    7. Gupta, Rajat & Morey, Johanna, 2022. "Empirical evaluation of demand side response trials in UK dwellings with smart low carbon technologies," Renewable Energy, Elsevier, vol. 199(C), pages 993-1004.
    8. Ovidiu Ivanov & Bogdan-Constantin Neagu & Gheorghe Grigoras & Florina Scarlatache & Mihai Gavrilas, 2021. "A Metaheuristic Algorithm for Flexible Energy Storage Management in Residential Electricity Distribution Grids," Mathematics, MDPI, vol. 9(19), pages 1-17, September.
    9. Jaszczur, Marek & Hassan, Qusay & Abdulateef, Ammar M. & Abdulateef, Jasim, 2021. "Assessing the temporal load resolution effect on the photovoltaic energy flows and self-consumption," Renewable Energy, Elsevier, vol. 169(C), pages 1077-1090.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hobman, Elizabeth V. & Frederiks, Elisha R. & Stenner, Karen & Meikle, Sarah, 2016. "Uptake and usage of cost-reflective electricity pricing: Insights from psychology and behavioural economics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 455-467.
    2. Ericson, Torgeir, 2011. "Households' self-selection of dynamic electricity tariffs," Applied Energy, Elsevier, vol. 88(7), pages 2541-2547, July.
    3. Torgeir Ericson, 2006. "Households' self-selection of a dynamic electricity tariff," Discussion Papers 446, Statistics Norway, Research Department.
    4. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    5. Woo, C.K. & Shiu, A. & Liu, Y. & Luo, X. & Zarnikau, J., 2018. "Consumption effects of an electricity decarbonization policy: Hong Kong," Energy, Elsevier, vol. 144(C), pages 887-902.
    6. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.
    7. Takanori Ida & Wenjie Wang, 2014. "A Field Experiment on Dynamic Electricity Pricing in Los Alamos:Opt-in Versus Opt-out," Discussion papers e-14-010, Graduate School of Economics Project Center, Kyoto University.
    8. Qiu, Yueming & Colson, Gregory & Wetzstein, Michael E., 2017. "Risk preference and adverse selection for participation in time-of-use electricity pricing programs," Resource and Energy Economics, Elsevier, vol. 47(C), pages 126-142.
    9. Boßmann, Tobias & Eser, Eike Johannes, 2016. "Model-based assessment of demand-response measures—A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1637-1656.
    10. Yan, Xing & Ozturk, Yusuf & Hu, Zechun & Song, Yonghua, 2018. "A review on price-driven residential demand response," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 411-419.
    11. Dong Gu Choi & Michael K. Lim & Karthik Murali & Valerie M. Thomas, 2020. "Why Have Voluntary Time‐of‐Use Tariffs Fallen Short in the Residential Sector?," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 617-642, March.
    12. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    13. Javier Bueno & Desiderio Romero-Jordán & Pablo del Río, 2020. "Analysing the Drivers of Electricity Demand in Spain after the Economic Crisis," Energies, MDPI, vol. 13(20), pages 1-18, October.
    14. Woo, C.K. & Sreedharan, P. & Hargreaves, J. & Kahrl, F. & Wang, J. & Horowitz, I., 2014. "A review of electricity product differentiation," Applied Energy, Elsevier, vol. 114(C), pages 262-272.
    15. Farhad Daruwala & Frank T. Denton & Dean C. Mountain, 2017. "One Size May Not Fit All: Welfare Benefits And Cost Reductions With Differentiated Household Electricity Rates In A General Equilibrium Model," Department of Economics Working Papers 2017-03, McMaster University.
    16. Tanaka, Makoto & Ida, Takanori, 2013. "Voluntary electricity conservation of households after the Great East Japan Earthquake: A stated preference analysis," Energy Economics, Elsevier, vol. 39(C), pages 296-304.
    17. Daruwala, Farhad & Denton, Frank T. & Mountain, Dean C., 2020. "One size may not fit all: Welfare benefits and cost reductions with optional differentiated household electricity rates," Resource and Energy Economics, Elsevier, vol. 61(C).
    18. Bradley, Peter & Coke, Alexia & Leach, Matthew, 2016. "Financial incentive approaches for reducing peak electricity demand, experience from pilot trials with a UK energy provider," Energy Policy, Elsevier, vol. 98(C), pages 108-120.
    19. Cao, K.H. & Qi, H.S. & Li, R. & Woo, C.K. & Tishler, A. & Zarnikau, J., 2023. "An experiment in own-price elasticity estimation for non-residential electricity demand in the U.S," Utilities Policy, Elsevier, vol. 81(C).
    20. Choi, Dong Gu & Murali, Karthik, 2022. "The impact of heterogeneity in consumer characteristics on the design of optimal time-of-use tariffs," Energy, Elsevier, vol. 254(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:153:y:2020:i:c:p:228-240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.