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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.

Suggested Citation

  • 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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