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Critical evaluation of European balancing markets to enable the participation of Demand Aggregators

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  • Barbero, Mattia
  • Corchero, Cristina
  • Canals Casals, Lluc
  • Igualada, Lucia
  • Heredia, F.-Javier

Abstract

European Directives are incentivizing consumers to play an active role in the electricity system and to collaborate to maintain its stability, which has been historically provided by large generation power plants. However, it is not easy for the System Operator to handle the coexistence of consumers and generators in the same markets. Under these circumstances, a new actor allows small residential and commercial consumers to participate in flexibility markets: The Demand Aggregator. However, balancing markets opened to Demand Aggregators still present several barriers that do not allow their practical participation. This study analyzes barriers and enablers of four European electricity markets and proposes a new market framework that would enhance Demand Aggregators’ participation. To validate the proposed market and to understand the economic potentials of aggregated small tertiary buildings, a Demand Aggregator is simulated using real building’s consumption data. Results show that technical requirements to participate in balancing markets such as the minimum bid size, the symmetricity of the offer and the product resolution strongly affect incomes for Demand Aggregators. However, neither in the proposed market, the creation of a Demand Aggregator whose business model is focused on small tertiary buildings does not seem realistic due to low incomes in comparison to the fixed costs necessary to enable Demand Response, especially if only the air conditioning system is considered.

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  • Barbero, Mattia & Corchero, Cristina & Canals Casals, Lluc & Igualada, Lucia & Heredia, F.-Javier, 2020. "Critical evaluation of European balancing markets to enable the participation of Demand Aggregators," Applied Energy, Elsevier, vol. 264(C).
  • Handle: RePEc:eee:appene:v:264:y:2020:i:c:s0306261920302191
    DOI: 10.1016/j.apenergy.2020.114707
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    19. Daiva Stanelyte & Neringa Radziukyniene & Virginijus Radziukynas, 2022. "Overview of Demand-Response Services: A Review," Energies, MDPI, vol. 15(5), pages 1-31, February.
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    21. Jura Jurčević & Ivan Pavić & Nikolina Čović & Denis Dolinar & Davor Zoričić, 2022. "Estimation of Internal Rate of Return for Battery Storage Systems with Parallel Revenue Streams: Cycle-Cost vs. Multi-Objective Optimisation Approach," Energies, MDPI, vol. 15(16), pages 1-17, August.

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