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Resource and revenue potential of California residential load participation in ancillary services

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  • Mathieu, Johanna L.
  • Dyson, Mark E.H.
  • Callaway, Duncan S.

Abstract

Increasing penetrations of intermittent renewable energy resources will require additional power system services. California recently adopted an energy storage mandate to support its renewable portfolio standard, which requires 33% of delivered energy from renewables by 2020. The objective of this paper is to estimate the amount of energy storage that could be provided by residential thermostatically controlled loads, such as refrigerators and air conditioners, and the amount of revenue that could be earned by loads participating in ancillary services markets. We model load aggregations as virtual energy storage, and use simple dynamical system models and publicly available data to generate our resource and revenue estimates. We find that the resource potential is large: 10–40GW/8–12GWh, which is significantly more than that required by the mandate. We also find that regulation and spinning/non-spinning reserve revenues vary significantly depending upon type of load and, for heat pumps and air conditioners, climate zone. For example, mean regulation revenues for refrigerators are $11/year, for electric water heaters are $24/year, for air conditioners are $0-32/year, and for heat pumps are $22–56/year. Both consumer choices, such as appliance settings, and policy, such as the design of ancillary service compensation and appliance standards, could increase revenue potentials.

Suggested Citation

  • Mathieu, Johanna L. & Dyson, Mark E.H. & Callaway, Duncan S., 2015. "Resource and revenue potential of California residential load participation in ancillary services," Energy Policy, Elsevier, vol. 80(C), pages 76-87.
    • Handle: RePEc:eee:enepol:v:80:y:2015:i:c:p:76-87
    DOI: 10.1016/j.enpol.2015.01.033
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    References listed on IDEAS

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    1. Dyson, Mark E.H. & Borgeson, Samuel D. & Tabone, Michaelangelo D. & Callaway, Duncan S., 2014. "Using smart meter data to estimate demand response potential, with application to solar energy integration," Energy Policy, Elsevier, vol. 73(C), pages 607-619.
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    2. Kumar, T. Bharath & Singh, Anoop, 2021. "Ancillary services in the Indian power sector – A look at recent developments and prospects," Energy Policy, Elsevier, vol. 149(C).
    3. Kircher, Kevin J. & Zhang, K. Max, 2021. "Heat purchase agreements could lower barriers to heat pump adoption," Applied Energy, Elsevier, vol. 286(C).
    4. Ehrlich, Lars G. & Klamka, Jonas & Wolf, André, 2015. "The potential of decentralized power-to-heat as a flexibility option for the german electricity system: A microeconomic perspective," Energy Policy, Elsevier, vol. 87(C), pages 417-428.
    5. Kumar, Abhishek & Meena, Nand K. & Singh, Arvind R. & Deng, Yan & He, Xiangning & Bansal, R.C. & Kumar, Praveen, 2019. "Strategic integration of battery energy storage systems with the provision of distributed ancillary services in active distribution systems," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
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    8. O'Shaughnessy, Eric & Cutler, Dylan & Ardani, Kristen & Margolis, Robert, 2018. "Solar plus: Optimization of distributed solar PV through battery storage and dispatchable load in residential buildings," Applied Energy, Elsevier, vol. 213(C), pages 11-21.
    9. Cheng, Lin & Wan, Yuxiang & Tian, Liting & Zhang, Fang, 2019. "Evaluating energy supply service reliability for commercial air conditioning loads from the distribution network aspect," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    10. Helms, Thorsten & Loock, Moritz & Bohnsack, René, 2016. "Timing-based business models for flexibility creation in the electric power sector," Energy Policy, Elsevier, vol. 92(C), pages 348-358.
    11. Canet, Alexandre & Qadrdan, Meysam, 2023. "Quantification of flexibility from the thermal mass of residential buildings in England and Wales," Applied Energy, Elsevier, vol. 349(C).
    12. Topi Rasku & Juha Kiviluoma, 2018. "A Comparison of Widespread Flexible Residential Electric Heating and Energy Efficiency in a Future Nordic Power System," Energies, MDPI, vol. 12(1), pages 1-27, December.
    13. Kohlhepp, Peter & Harb, Hassan & Wolisz, Henryk & Waczowicz, Simon & Müller, Dirk & Hagenmeyer, Veit, 2019. "Large-scale grid integration of residential thermal energy storages as demand-side flexibility resource: A review of international field studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 527-547.
    14. Gjorgievski, Vladimir Z. & Markovska, Natasa & Abazi, Alajdin & Duić, Neven, 2021. "The potential of power-to-heat demand response to improve the flexibility of the energy system: An empirical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    15. David Ribó-Pérez & Luis Larrosa-López & David Pecondón-Tricas & Manuel Alcázar-Ortega, 2021. "A Critical Review of Demand Response Products as Resource for Ancillary Services: International Experience and Policy Recommendations," Energies, MDPI, vol. 14(4), pages 1-25, February.
    16. Arteconi, Alessia & Patteeuw, Dieter & Bruninx, Kenneth & Delarue, Erik & D’haeseleer, William & Helsen, Lieve, 2016. "Active demand response with electric heating systems: Impact of market penetration," Applied Energy, Elsevier, vol. 177(C), pages 636-648.
    17. Ribó-Pérez, D. & Carrión, A. & Rodríguez García, J. & Álvarez Bel, C., 2021. "Ex-post evaluation of Interruptible Load programs with a system optimisation perspective," Applied Energy, Elsevier, vol. 303(C).
    18. Romero Rodríguez, Laura & Brennenstuhl, Marcus & Yadack, Malcolm & Boch, Pirmin & Eicker, Ursula, 2019. "Heuristic optimization of clusters of heat pumps: A simulation and case study of residential frequency reserve," Applied Energy, Elsevier, vol. 233, pages 943-958.

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