Demand charges and user flexibility – Exploring differences in electricity consumer types and load patterns within the Swedish commercial sector

Zoest, Vera van; Gohary, Fouad El; Ngai, Edith C.-H.; Bartusch, Cajsa

doi:10.1016/j.apenergy.2021.117543

Cited by 13 publications

(9 citation statements)

References 24 publications

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“…Flexibility potentials of electrical consumers can be unlocked in response to power system requirements when a power shortage occurs on the supply side [3] or system reliability is jeopardized due to unforeseen failure. Demand-side flexibility is discussed in different sectors, including residential [4], industrial [5], commercial [6], and agricultural sectors [7]. Therefore, it needs expert knowledge to unlock, aggregate, and finally integrate flexibility potentials into power systems.…”

Section: Introductionmentioning

confidence: 99%

Demand-Side Flexibility in Power Systems: A Survey of Residential, Industrial, Commercial, and Agricultural Sectors

Golmohamadi

2022

Sustainability

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In recent years, environmental concerns about climate change and global warming have encouraged countries to increase investment in renewable energies. As the penetration of renewable power goes up, the intermittency of the power system increases. To counterbalance the power fluctuations, demand-side flexibility is a workable solution. This paper reviews the flexibility potentials of demand sectors, including residential, industrial, commercial, and agricultural, to facilitate the integration of renewables into power systems. In the residential sector, home energy management systems and heat pumps exhibit great flexibility potential. The former can unlock the flexibility of household devices, e.g., wet appliances and lighting systems. The latter integrates the joint heat–power flexibility of heating systems into power grids. In the industrial sector, heavy industries, e.g., cement manufacturing plants, metal smelting, and oil refinery plants, are surveyed. It is discussed how energy-intensive plants can provide flexibility for energy systems. In the commercial sector, supermarket refrigerators, hotels/restaurants, and commercial parking lots of electric vehicles are pointed out. Large-scale parking lots of electric vehicles can be considered as great electrical storage not only to provide flexibility for the upstream network but also to supply the local commercial sector, e.g., shopping stores. In the agricultural sector, irrigation pumps, on-farm solar sites, and variable-frequency-drive water pumps are shown as flexible demands. The flexibility potentials of livestock farms are also surveyed.

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Section: Introductionmentioning

confidence: 99%

Demand-Side Flexibility in Power Systems: A Survey of Residential, Industrial, Commercial, and Agricultural Sectors

Golmohamadi

2022

Sustainability

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“…In electricity markets with a Capacity Remuneration Mechanism (CRM) customers are able to pay for their capacity consumption separately from energy. Utilities typically measure the capacity consumption of industrial and large commercial customers and apply a "demand charge" to that consumption, [16], [25]. The demand charge (in dollars per kW) is usually hundreds of times higher than the energy price (in dollars per kWh) for the same valuation period, [6].…”

Section: Introductionmentioning

confidence: 99%

“…In addition, peak system demand may be measured when it occurs within a year or over specific control periods, [7]. In some countries, such as Australia and Sweden, customers that use smart meters may pay a demand charge in dollars per kW or kVA for their maximum demand during a month or a year, [5], [11], [18], [25]. In summary, customers may pay a demand charge per kWh or per kW/kVA.…”

Section: Introductionmentioning

confidence: 99%

“…In spite of the importance of the demand charge in electricity bills, the existing literature has focused on the analysis of DR programs that use variations in energy prices or other incentives. There are few empirical studies that have measured the response of power consumption to changes in the demand charge, such as [11], [22] and [25]. This paper contributes to the literature of Demand Side Management and DR programs with a theoretical analysis of the incentives of different tariff structures for the capacity consumption of industrial and commercial customers.…”

Section: Introductionmentioning

confidence: 99%

“…Existing literature indicates that customers have a low but statistically significant electricity price elasticity in the short term. For industrial and commercial customers see[2],[10],[12],[13],[25].…”

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confidence: 99%

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Managing Electricity Demand through Demand Charges for Industrial and Commercial Customers

Lima¹

2022

Preprint

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<p>Demand charges for capacity consumption may represent a large proportion of industrial and commercial cus- tomers’ electricity bills. However, their potential to supplement existing Demand Response Programs to smooth or reduce load consumption in those clients has not been fully explored in the literature. In this paper, we analyzed the economic incentives for reducing and smoothing electricity demand of three different tariff structures that are already used to apply demand charges in electricity markets. Our analysis shows that demand charges could be used as powerful price signals to reduce and reallocate the load consumption of industrial and commercial customers. However, because they offer different incentives but share sim- ilar goals for efficient consumption, they must be designed in conjunction with Demand Response Programs. </p>

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Improving the representation of energy efficiency in an energy system optimization model

et al. 2022

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Energy system optimization models (ESOMs) are designed to examine the potential effects of a proposed policy, but often represent energy-efficient technologies and policies in an overly simplified way. Most ESOMs include different end-use technologies with varying efficiencies and select technologies for deployment based solely on least-cost optimization, which drastically oversimplifies consumer decisionmaking. In this paper, we change the structure of an existing ESOM to model energy efficiency in way that is consistent with microeconomic theory. The resulting model considers the effectiveness of energyefficient technologies in meeting energy service demands, and their potential to substitute electricity usage by conventional technologies. To test the revised model, we develop a simple hypothetical case and use it to analyze the welfare gain from an energy efficiency subsidy versus a carbon tax policy. In the simple test case, the maximum recovered welfare from an efficiency subsidy is less than 50% of the first-best carbon tax policy.

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Demand charges and user flexibility – Exploring differences in electricity consumer types and load patterns within the Swedish commercial sector

Cited by 13 publications

References 24 publications

Demand-Side Flexibility in Power Systems: A Survey of Residential, Industrial, Commercial, and Agricultural Sectors

Demand-Side Flexibility in Power Systems: A Survey of Residential, Industrial, Commercial, and Agricultural Sectors

Managing Electricity Demand through Demand Charges for Industrial and Commercial Customers

Improving the representation of energy efficiency in an energy system optimization model

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