A Critical Review of Demand Response Products as Resource for Ancillary Services: International Experience and Policy Recommendations

The European energy transition increasingly requires flexibility to ensure reliable operation of the electricity system, making use of demand response, a promising concept. With technological advances in the fields of big data analysis and the internet of things, small- and medium-sized prosumers could also provide flexibility services through aggregators. A lot of conceptual work has been conducted recently to formulate business models in this context, but their viability still remains unclear. In this paper, a quantitative validation is conducted of two business models that are frequently proposed in the scientific discussion. The aim of this work is to explore the economic limits of these business models and show under which conditions they can be profitable for small- and medium-sized prosumers. For this purpose, a multi-level contribution margin calculation for several scenarios, customer segments and target markets is conducted. The results show that the profitability for the participation of small loads is still very low under current market conditions. Especially for household consumers, transaction costs are too high to be covered by the revenues. Considering the quantitative results, in the future profitable business cases can only be expected for medium-sized tertiary consumers.

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“…[1]. In some countries, DR schemes have a long tradition, whereas in others the efforts to develop DR programmes start from zero [2].…”

Section: Introduction 1backgroundmentioning

confidence: 99%

“…Another example is China, where specific demand-side management policies introduce DR programs in the monopolized national energy market [8]. For an in-depth review on DR initiatives and products on an international level, one can refer to [2].…”

Section: Introduction 1backgroundmentioning

confidence: 99%

Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers

2021

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“…Hence, demand response (DR) emerges. DR emphasizes the direct interaction between the power users and systems via the electricity market or other patterns featuring faster response action, lower cost, better environmental protection, and high potential to increase the system's flexibility (Huang et al, 2019), which is desired by users and utilities, resulting in a fast development in recent years (Ribó-Pérez et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

A Weak-Consistency–Oriented Collaborative Strategy for Large-Scale Distributed Demand Response

et al. 2021

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Large-scale distributed demand response is a hotspot in the development of power systems, which is of much significance in accelerating the consumption of new energy power generation and the process of clean energy substitution. However, the rigorous distributed algorithms utilized in current research studies are mostly very complicated for the large-scale demand response, requiring high quality of information systems. Considering the electrical features of power systems, a weak-consistency–oriented collaborative strategy is proposed for the practical implementation of the large-scale distributed demand response in this study. First, the basic conditions and objectives of demand response are explored from the view of system operators, and the challenges of large-scale demand response are discussed and furthermore modelled with a simplification based on the power system characteristics, including uncertainties and fluctuations. Then, a weakly consistent distributed strategy for demand response is proposed based on the Paxos distributed algorithm, where the information transmission is redesigned based on the electrical features to achieve better error tolerance. Using case studies with different information transmission error rates and other conditions, the proposed strategy is demonstrated to be an effective solution for the large-scale distributed demand response implementation, with a robust response capability under even remarkable transmission errors. By integrating the proposed strategy, the requirement for the large-scale distributed systems, especially the information systems, is highly eased, leading to the acceleration of the practical demand response implementation.

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“…Therefore, some of the generation units operate far from the minimum fuel consumption point [30]. Moreover, the operation and maintenance cost increases in inefficient generation systems [30] along with the need to keep high-cost revolving reserves for an immediate response [31]. The analysis of a standard grid load curve in Figure 2 presents a decomposing of the power curve to an average power component and high-frequency harmonic components.…”

Section: Introductionmentioning

confidence: 99%

Sizing Procedure for System Hybridization Based on Experimental Source Modeling in Grid Application

et al. 2021

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Hybridization of sources is spreading worldwide by utilizing renewable sources and storage units as standard parts of every grid. The conjunction of energy source and storage type open the door to reshaping the sustainability and robustness of the mains while improving system parameters such as efficiency and fuel consumption. The solution fits existing networks as well as new ones. The study proposes the creation of an accurate optimal sizing procedure for setting the required rating of each type of source. The first step is to model the storage and energy sources by using real experimental results for creating the generic database. Then, data on the mission profile, system constraints, and the minimization target function are inserted. The mission profile is then analyzed to determine the minimum and maximum energy source rating. Next, the real time energy management system controller is used to find the set of solutions for each available energy source and the optimal compatible storage in the revealed band to fulfil the mission task. A Pareto-curve is then plotted to present the optimal findings of the sizing procedure. Ultimately, the main research contribution is the far more accurate sizing results. A case study shows that relying on the standard method leads to noncompliance of sizing constraints, while the proposed procedure leads to fulfilling the mission successfully. First, by utilizing experimentally based energy and a storage unit. Second, by using the same real time energy management system controller in the sizing procedure.

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A Critical Review of Demand Response Products as Resource for Ancillary Services: International Experience and Policy Recommendations

Cited by 36 publications

References 45 publications

Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers

Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers

A Weak-Consistency–Oriented Collaborative Strategy for Large-Scale Distributed Demand Response

Sizing Procedure for System Hybridization Based on Experimental Source Modeling in Grid Application

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