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On the economic potential for electric load management in the German residential heating sector – An optimising energy system model approach


  • Fehrenbach, Daniel
  • Merkel, Erik
  • McKenna, Russell
  • Karl, Ute
  • Fichtner, Wolf


Against the background of the ambitious German targets for renewable energy and energy efficiency, this paper investigates the economic potential for thermal load management with virtual power plants consisting of micro-cogeneration plants, heat pumps and thermal storage within the residential sector. An optimising energy system model of the electricity and residential heat supply in Germany is developed in the TIMES (The Integrated MARKAL EFOM System) modelling framework and used to determine capacity developments and dispatch of electricity and residential heat generation technologies until 2050. The analysed scenarios differ with respect to the rate of technological development of heat and power devices, fuel and CO2 prices as well as renewable electricity expansion. Results show that high fuel prices and a high renewable electricity expansion favour heat pumps and insulation measures over micro-cogeneration, whereas lower fuel prices and lower renewable electricity expansion relatively favour the expansion of micro-cogeneration. In the former case heat pump capacities increase to around 67 GWel, whereas in the latter case the total capacity of micro-cogeneration reaches 8 GWel. With the aid of thermal storage, this provides considerable flexibility for electrical load shifting through heat pumps and electricity generation from micro-cogeneration in residential applications, needed for the integration of fluctuating renewable electricity technologies.

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  • Fehrenbach, Daniel & Merkel, Erik & McKenna, Russell & Karl, Ute & Fichtner, Wolf, 2014. "On the economic potential for electric load management in the German residential heating sector – An optimising energy system model approach," Energy, Elsevier, vol. 71(C), pages 263-276.
  • Handle: RePEc:eee:energy:v:71:y:2014:i:c:p:263-276
    DOI: 10.1016/

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    Cited by:

    1. Bloess, Andreas, 2019. "Impacts of heat sector transformation on Germany’s power system through increased use of power-to-heat," Applied Energy, Elsevier, vol. 239(C), pages 560-580.
    2. Bahl, Björn & Lampe, Matthias & Voll, Philip & Bardow, André, 2017. "Optimization-based identification and quantification of demand-side management potential for distributed energy supply systems," Energy, Elsevier, vol. 135(C), pages 889-899.
    3. Katz, Jonas & Andersen, Frits Møller & Morthorst, Poul Erik, 2016. "Load-shift incentives for household demand response: Evaluation of hourly dynamic pricing and rebate schemes in a wind-based electricity system," Energy, Elsevier, vol. 115(P3), pages 1602-1616.
    4. Kirchem, Dana & Lynch, Muireann Á & Casey, Eoin & Bertsch, Valentin, 2019. "Demand response within the energy-for-water-nexus: A review," Papers WP637, Economic and Social Research Institute (ESRI).
    5. Andreas Bloess & Wolf-Peter Schill & Alexander Zerrahn, 2017. "Power-to-Heat for Renewable Energy Integration: Technologies, Modeling Approaches, and Flexibility Potentials," Discussion Papers of DIW Berlin 1677, DIW Berlin, German Institute for Economic Research.
    6. Ambrosius, Mirjam & Grimm, Veronika & Sölch, Christian & Zöttl, Gregor, 2018. "Investment incentives for flexible demand options under different market designs," Energy Policy, Elsevier, vol. 118(C), pages 372-389.
    7. Boßmann, Tobias & Eser, Eike Johannes, 2016. "Model-based assessment of demand-response measures—A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1637-1656.
    8. Sonja Simon & Tobias Naegler & Hans Christian Gils, 2018. "Transformation towards a Renewable Energy System in Brazil and Mexico—Technological and Structural Options for Latin America," Energies, MDPI, Open Access Journal, vol. 11(4), pages 1-26, April.
    9. McKenna, Russell & Merkel, Erik & Fichtner, Wolf, 2017. "Energy autonomy in residential buildings: A techno-economic model-based analysis of the scale effects," Applied Energy, Elsevier, vol. 189(C), pages 800-815.
    10. Merkel, Erik & Fehrenbach, Daniel & McKenna, Russell & Fichtner, Wolf, 2014. "Modelling decentralised heat supply: An application and methodological extension in TIMES," Energy, Elsevier, vol. 73(C), pages 592-605.
    11. 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.
    12. Bjoern Felten & Christoph Weber, "undated". "Modeling the Value of Flexible Heat Pumps," EWL Working Papers 1709, University of Duisburg-Essen, Chair for Management Science and Energy Economics.
    13. Bloess, Andreas & Schill, Wolf-Peter & Zerrahn, Alexander, 2018. "Power-to-heat for renewable energy integration: A review of technologies, modeling approaches, and flexibility potentials," Applied Energy, Elsevier, vol. 212(C), pages 1611-1626.
    14. Li, Pei-Hao & Pye, Steve, 2018. "Assessing the benefits of demand-side flexibility in residential and transport sectors from an integrated energy systems perspective," Applied Energy, Elsevier, vol. 228(C), pages 965-979.
    15. Hansen, Kenneth & Connolly, David & Lund, Henrik & Drysdale, David & Thellufsen, Jakob Zinck, 2016. "Heat Roadmap Europe: Identifying the balance between saving heat and supplying heat," Energy, Elsevier, vol. 115(P3), pages 1663-1671.
    16. Jun Dong & Huijuan Huo & Sen Guo, 2016. "Demand Side Management Performance Evaluation for Commercial Enterprises," Sustainability, MDPI, Open Access Journal, vol. 8(10), pages 1-23, October.
    17. Felten, Björn & Weber, Christoph, 2018. "The value(s) of flexible heat pumps – Assessment of technical and economic conditions," Applied Energy, Elsevier, vol. 228(C), pages 1292-1319.


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