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Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications

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  • Feuerriegel, Stefan
  • Neumann, Dirk

Abstract

Demand Response allows for the management of demand side resources in real-time; i.e. shifting electricity demand according to fluctuating supply. When integrated into electricity markets, Demand Response can be used for load shifting and as a replacement for both control reserve and balancing energy. These three usage scenarios are compared based on historic German data from 2011 to determine that load shifting provides the highest benefit: its annual financial savings accumulate to €3.110M for both households and the service sector. This equals to relative savings of 2.83% compared to a scenario without load shifting. To improve Demand Response integration, the proposed model suggests policy implications: reducing bid sizes, delivery periods and the time-lag between market transactions and delivery dates in electricity markets.

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  • Feuerriegel, Stefan & Neumann, Dirk, 2016. "Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications," Energy Policy, Elsevier, vol. 96(C), pages 231-240.
    • Handle: RePEc:eee:enepol:v:96:y:2016:i:c:p:231-240
    DOI: 10.1016/j.enpol.2016.05.050
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    9. Märkle-Huß, Joscha & Feuerriegel, Stefan & Neumann, Dirk, 2018. "Large-scale demand response and its implications for spot prices, load and policies: Insights from the German-Austrian electricity market," Applied Energy, Elsevier, vol. 210(C), pages 1290-1298.
    10. Andreea Valeria Vesa & Tudor Cioara & Ionut Anghel & Marcel Antal & Claudia Pop & Bogdan Iancu & Ioan Salomie & Vasile Teodor Dadarlat, 2020. "Energy Flexibility Prediction for Data Center Engagement in Demand Response Programs," Sustainability, MDPI, vol. 12(4), pages 1-23, February.
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    14. Bertsch, Valentin & Harold, Jason & Fell, Harrison, 2019. "Consumer preferences for end-use specific curtailable electricity contracts on household appliances during peak load hours," Papers WP632, Economic and Social Research Institute (ESRI).
    15. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
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    23. Yamaguchi, Yohei & Chen, Chien-fei & Shimoda, Yoshiyuki & Yagita, Yoshie & Iwafune, Yumiko & Ishii, Hideo & Hayashi, Yasuhiro, 2020. "An integrated approach of estimating demand response flexibility of domestic laundry appliances based on household heterogeneity and activities," Energy Policy, Elsevier, vol. 142(C).

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