No abstract

No abstract

Demand response integration in balancing energy markets can provide significant financial savings for grid operators and market participants and promote optimal resource allocation. To facilitate demand response participation in power system balancing, the service must not only provide economic gains for the existing market participants, but it also has to present a viable business case for demand response service providers. Currently, in the Baltic states, there is no demand side participation in balancing markets. To support balancing market development, we analysed the economic potential of demand response for service providers. To forecast market conditions, we employed stochastic simulations for energy market prices and balancing product activation. Furthermore, to calculate the economic gains of a service provider, we used technical parameters of fridges obtained in a demand response pilot study and the demand response aggregation settlement model proposed by the Baltic TSOs and Finnish TSO. The preliminary results suggest sufficient financial incentives for future investments.

In this paper, a tool for the economic assessment of a potential demand response asset used for power system balancing is presented. The model tackles uncertainties in electricity market prices and system imbalance by employing Monte Carlo simulations. While the model provides vast customizability options, the potential demand response benefits for a particular type of consumer, smart electric thermal storage, are the focus of the case study. It is found that such type of operations can be economically feasible for the asset owner, but on the condition that sufficient proportion of the balancing renumeration is shared with the owner by the aggregator.

No abstract