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A methodological framework for designing dynamic heat price for demand response in district heating

Author

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  • Mokhtari, Reza
  • Junker, Rune Grønborg
  • Madsen, Henrik
  • Li, Rongling

Abstract

Currently, the price per consumption of most district heating consumers is static, providing no incentive for consumers to change their heating behavior. A dynamic pricing structure can encourage consumers to adjust their heat demand according to supply conditions. This paper presents a methodology for designing day-ahead dynamic price profiles for district heating to encourage buildings for certain demand response purposes effectively. This method relies on a method to characterize the energy flexibility of buildings and an inverse optimization to obtain the optimal dynamic price profile. The methodology is tested on a residential neighborhood as a case study, using a virtual experiment that includes buildings and a district heating network. Results show that the designed dynamic price could encourage consumers to change their demand profile to match a pre-defined load-shifting profile with 16.6 % MAPE. Accordingly, the peak load was reduced by 84.4 % as a result of responding to a tailored price profile, considering the flexibility potential of the neighborhood. In addition, heat costs in the neighborhood were reduced by 46.6 % compared to the flat price. The findings of this paper highlight the benefits of the dynamic heat price for district heating operators and consumers over the flat price.

Suggested Citation

  • Mokhtari, Reza & Junker, Rune Grønborg & Madsen, Henrik & Li, Rongling, 2025. "A methodological framework for designing dynamic heat price for demand response in district heating," Energy, Elsevier, vol. 324(C).
    • Handle: RePEc:eee:energy:v:324:y:2025:i:c:s0360544225015798
    DOI: 10.1016/j.energy.2025.135937
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