No abstract

This paper proposes a Stackelberg game approach to minimize both the wind power imbalances and carbon emissions by harnessing demand response (DR) of residential heating loads fed by electricity or district heating (DH) options. The problem is formulated as a bilevel optimization model. An aggregator (leader) at the upper level aims at minimizing the mismatch between electricity demand and wind power while mitigating the carbon emissions arising from the DH system. The aggregator owns a wind farm and is responsible for controlling the DH generation through a combustion-based source and a deep well heat pump system (DWHP), which converts power into heat by utilizing wind power and replacing combustion-based DH. The aggregator submits bonuses to the households (followers) at the lower level incentivizing them to modify their consumption profile. The households receive the bonus offers and consequently decide how to optimize their net electricity and DH energy payments via an upward or downward DR strategy. The uncertainties associated with wind power and heating loads are considered using a stochastic programming framework. Long term thermal performance of the DWHP is studied separately. Results prove that the proposed bilevel framework enables significant reductions in wind power imbalances, carbon emissions, and energy payments. INDEX TERMS Stackelberg game, demand response, district heating, deep well heat pump, bilevel optimization, power to heat, sector coupling

To achieve a successful integration of fluctuating renewable power generation, the power-to-heat (P2H) conversion is seen as an efficient solution that remedies the issue of curtailments as well as reduces carbon emissions prevailing in the district heating (DH) sector. Concurrently, the need for storage is also increasing to maintain a continuous power supply. Hence, this paper presents a MILP-based model to optimize the size of thermal storage required to satisfy the annual DH demand of a community solely by P2H conversion employing renewable energy. The DH is supplied by the optimal operation of a novel 2-km deep well heat pump system (DWHP) equipped with thermal storage. To avoid computational intractability, representative time steps with varying time duration are chosen by employing hierarchical agglomerative clustering that aggregates adjacent hours chronologically. The value of demand response and the effect of interannual weather variability are also analyzed. Numerical results from a Finnish case study show that P2H conversion utilizing small thermal storage in tandem with the DWHP is able to cover the annual DH demand, thus leading to a carbon-neutral DH system and, at the same time, mitigating the curtailment of excessive wind generation. Compared with the annual DH demand, an average thermal storage size of 29.17 MWh (2.58%) and 13.99 MWh (1.24%) are required in the business-as-usual and the demand response cases, respectively.