Demand Response

Mirna Gržanić, Ph.D

Faculty of Electrical Engineering and Computing
1 University of Zagreb
 Content

▪ Introduction
▪ Types of demand response programs
▪ Implicit
▪ Explicit
▪ Participants
▪ Examples from of the world
▪ Excercises
2
 Fit for 55'

▪ New goals set in the green energy transition:

▪ 55% reduction in emissions
▪ Increasing energy efficiency
▪ Greater integration of RES
▪ Electrification of traffic and heating
▪ The end user in the center of the transition
▪ Enable the comparison of different electricity
prices in a transparent, easily accessible and
comprehensible manner
3 ▪ Provide access to dynamic prices
▪ Passive consumer → active customer, customer
with own production, user of self-supply facility
 Why is demand response necessary?

Wind forecast
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2000
MW

1000

4 -1000
18. Apr 19. Apr 20. Apr 21. Apr 22. Apr 23. Apr 24. Apr 25. Apr
Time horizon

Measured & Upscaled Most recent forecast P10

Most recent forecast Most recent forecast P90
Day-ahead forecast P10 Day-ahead forecast
Day-ahead forecast P90 Week-ahead forecast
Active Decremental Bids
 End users in demand
response

▪ End users will be able to actively participate

in all markets, independently, aggregated or
within the energy community
▪ Production of electricity
▪ Demand response
▪ Household energy management system
▪ Smart meters
5▪ Dynamic electricity prices
▪ Various incentives for flexibility
 Flexibility providers

Technology Congestion Energy production Provision of Positive influence

reserve on emissions
FACTS devices + - - -/+
Gas power plants - + + -
Network
+ - - -/+
reconfiguration
Energy storage + -/+ + -/+
Demand response + - /+ + -/+
6
 Demand response definition

▪ Changes in electricity consumption based on price changes or triggered by

different incentives.

7
 Types of demand response programs

▪ Implicit or price-based
▪ Based on the change in the price of electricity, end consumers reduce/increase their
consumption in order to achieve the lowest possible cost of electricity.
▪ Explicit or based on incentives
▪ End consumers change their consumption profile based on the request from the system
operator
▪ TSO –frequency control, voltage and congestion management
▪ DSO – local voltage control and congestion management
▪ Directly paid, bill reduction, energy control options, energy saving programs
8
 Implicit demand response programs

▪ The supplier determines the price of electricity with the aim that the rational
end user will reduce their consumption during periods of high prices, and
increase when the price is low
▪ Most countries have some kind of implicit programs
▪ Two-tariff or multi-tariff systems
▪ In some countries, dynamic hourly prices

9
 Examples of implicit programs - different electricity prices

▪ Fixed price – the price is constant over time.

▪ Tariff systems (TOU) – the price changes two or more times a day.
▪ Real Time Pricing (RTP) – the price changes hourly and follows the load profile.
▪ Critical Peak Pricing (CPP) – a fixed price or tariff system with occasional high
price periods.
▪ Critical Peak Rebate (CPR) – similar to CPP, but the supplier pays its customers
to reduce consumption and the price does not change.
10 ▪ Step wise power tariff (SWPT) – the amount of electricity is divided into steps.
Each step corresponds to a unit price that increases with the steps. The monthly
price is equal to the sum of the product of the amount of electricity consumed
in each step and the corresponding price.
 Different tariffs

11
 Dynamic hourly rates

12
 Critical peak power pricing

13
 Explicit demand response programs

▪ Direct load control

▪ Curtailable load programs
▪ Interruptible load programs
▪ Market options

14
 Direct load control

▪ Direct control of end-user consumption (cooling devices, lighting, water

heating, pool pumps) by the system operator.
▪ The system operator states in the contract:
▪ maximum number of actions per year,
▪ the maximum duration of the required service (load reduction for a predetermined period
of time),
▪ without prior notice or very shortly before the reduction/disconnection of certain devices,
▪ consumers receive fixed monthly payments, while additional payment if the service is
activated depends on the type of contract concluded,
15
▪ predetermined needs of end users (their comfort) are taken into account.
 Curtailable load programs

▪ Consumers agree to turn off the load during the contractually predefined time
intervals
▪ The request to disconnect the consumption is announced a few minutes or
hours in advance, or even a day before the service is required
▪ Contracts define:
▪ Manual or automatic shutdown of consumption,
▪ The amount of the penalty if the consumer does not provide the agreed amount of service,
▪ Maximum service duration,
16 ▪ Annual maximum duration.
▪ Various incentives:
▪ Monthly reservation fee (EUR/kW) with or without activation fee (EUR/kWh),
▪ Market prices.
 Interruptible load programs

▪ Partial or complete interruption of load in case of extremely high price of

electricity or when the reliability and safety of the system is threatened.
▪ Consumers and system operators sign a contract stating:
▪ the amount of consumption that can be reduced,
▪ fee for providing the service (fixed monthly incentive with or without an activation fee and
penalties for not providing the service)
▪ maximum duration of one activation,
17 ▪ maximum number of activations per year,
▪ conditions under which the service can be activated.
 Why participate in demand response?

▪ Financial profit
▪ Environmental care
▪ Helping the system

18
 Participants
▪ Users (those who benefit from the program):
▪ Distribution System Operator (DSO)
▪ Transmission System Operator (TSO)
▪ Intermediaries: those who act between service users and
service providers (e.g. aggregators)
▪ Providers: those who have flexibile devices and can change their
load
▪ E.g. households, industrial plants
19
 Aggregator
▪ In a virtual power plant, decentralized units in the
power grid are connected and controlled by a
single, centralized control system called an
aggregator.
▪ Aggregators must provide easy access and a high
level of automation to attract different end
customers and act as a flexibility service provider
in accordance with the needs of the power
20 system.
▪ “Aggregation" means a function performed by a
natural or legal person that combines multiple
customer loads or generated electricity for sale,
purchase or auction in any electricity market
 Participation in
the market

▪ Participation in the energy market

▪ Provision of frequency service
▪ Provision of non-frequency services
(voltage control and congestion
management)
21
 Model 0 – aggregator as an existing market participant

▪ Aggregators are already existing market participants

(suppliers or a balancing responsible party)
▪ Flexibility is not separate from traditional energy
supply
▪ Advantage: the end user is offered the option of
providing flexibility services directly in addition to the
price of electricity
▪ The model does not encourage independent
22
aggregators that trade only in flexibility markets
▪ Aggregators must conclude bilateral contracts with
already existing market participants
 Model 1 – the aggregator helps in frequency control

▪ An independent aggregator that participates in the

provision of frequency stabilization services
▪ Direct trading with TSO
▪ Limited duration and small volume of services required
for frequency stabilization – activation of flexibility
services will not cause excessive balancing costs

23
 Model 2 – aggregator provides flexibility services

▪ The aggregator cooperates with already existing balancing

groups and is not responsible for the supply of electricity
▪ Balancing costs are borne by the aggregator itself
▪ The aggregator can participate in all markets
▪ End users can choose their aggregator and must not be
prevented in any way from providing ancillary services by
their supplier
24
 Model 3 – electricity and flexibility

▪ The aggregator cooperates with the electricity supplier

▪ Aggregator responsible for both electricity supply and
flexibility services
▪ The main advantage is the separate payment of basic
inflexible consumption and flexible consumption

25
 Aggregators in the
world

▪ Kiwi power
▪ Next Kraftwerke
▪ Energy Pool
▪ Flexible Power
▪ KOER
▪ Min 100 kW reduction in
26 consumption
▪ Shopping centers,
business centers,
industry, hotels, https://www.koer.com/
hospitals, data centers
 Roles

Energy market Energy market

Ancillary service market Ancillary service market

Energy
Flexibility

Aggregator Supplier

27
Commercial Commercial
Household Household
consumer consumer
 System level application

▪ Arbitrage
▪ Adequacy of the system
▪ Balancing
▪ Footroom
▪ Flexiramp

28
 Network application

▪ Voltage control
▪ Congestion control
▪ Loss reduction
▪ Delay in investment

29
 Application by end users

▪ Arbitrage
▪ Reduction of peak power
▪ Increase self-utilization

30
 Demand response Providers

▪ Residential sector (households)

▪ Commercial consumers
▪ Industrial consumers

31
 Energy consumption in the household

32
 Active stay in the household/presence of household members
Number of active occupants

0
0:00 2:00 4:00 6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 0:00

10000
Dwelling load profile (W) time of day
9000
33 8000
7000
6000
5000
4000
3000
2000
1000
0
0:00 2:00 4:00 6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 0:00
 Controllable devices in the household

▪ Freezer and refrigerators

▪ Boilers for heating water
Thermal tanks
▪ Electric heaters
▪ AC devices
▪ Washing machines and dishwashers, tumble dryers
▪ Battery storage
34 ▪ Electric vehicles
 Power [VA/VAr/W]

35
100
150
200
250
300
350

0
50
1:53:12 PM
4:52:57 PM
7:52:42 PM
10:52:27 PM
1:52:12 AM
4:51:57 AM
7:51:42 AM
10:51:27 AM
1:51:11 PM
4:50:56 PM
7:50:41 PM
10:50:26 PM
Thermal tanks

1:50:11 AM
4:49:56 AM

By [with]
7:49:41 AM
10:49:26 AM
1:49:11 PM
4:48:56 PM
7:48:41 PM
Refrigerator power consumption

10:48:26 PM
1:48:11 AM
4:47:56 AM
7:47:41 AM
10:47:26 AM
1:47:11 PM

Power [W]
500

0
1000
1500
2000
2500

Date and time

Electric water heater power consumption
 Controllable devices with fixed cycles of consumption and
duration
Dish washer power consumption

▪ Moving the wash/dry cycle does

2500

2000
not increase the total electricity

Power [W]
1500
consumption 1000

▪ The schedule can be agreed in 500

advance without disturbing the 0

13:48 14:02 14:16 14:31 14:45 15:00 15:14
comfort Time [ hh:mm ]

Clothes dryer power consumption Washing machine power consumption

1200 2500
1000
36 2000
Power [W]

Power [W]
800
1500
600
1000
400

200 500

0 0
10:48 12:00 13:12 14:24 15:36 10:33 11:45 12:57 14:09

Time [ hh:mm ] Time [ hh:mm ]

 Commercial consumers

▪ HVAC systems
▪ Public charging stations for electric vehicles

37
 Industry

▪ Paper industry
▪ Food industry
▪ Petrochemical industry
▪ Wood industry
▪ Various metal processing industries

Management of energy consumption

in the meat industry
38

Energy consumption in the meat industry

 Infrastructure

▪ Explicit demand response

programs
▪ Communication
infrastructure
▪ Measurement
infrastructure
▪ Control infrastructure
▪ Implicit demand response
programs
39
▪ Smart meters
▪ Communication
infrastructure
▪ Measurement
infrastructure
 Communication infrastructure

▪ Components that receive/send

signals from the consumption
management platform and send
them to end users
▪ Communication can be:
▪ One-sided – the activation signal is
only sent to end users
▪ Two-sided – the activation signal is
sent to the end users who then send
40 some feedback
▪ Household energy management
system
 Structure for measurement

▪ Data collection mechanisms:

▪ Peak power measurement
▪ Energy consumption measurement
▪ Data on the quality of electricity (active and reactive power, voltage, current, power factor)
▪ Households usually have measurements at hourly intervals
▪ Industry and commercial consumers – 15 min interval
▪ Smart meters
41
 Smart meters

▪ The communication infrastructure is

unidirectional
▪ It is only used for reading measurements
▪ Price signals are sent to email, through
some mobile application, by SMS
▪ Advanced devices can display the price
and consumption in real time on the
screen
42
Installation of smart meters
▪ Almost 100% smart meter rollout:
▪ Denmark;
▪ Estonia;
▪ Finland;
▪ Italy;
▪ Spain;
▪ Sweden.

43

Source: Clean Energy Technology Observatory, Smart grids in the European union Status report on technology development, trends, value chains and markets : 2023
 Assessments of positive aspects of advanced meters in the EU

Meter reading operation sa ings

on technica administrati e, inc uding fraud osses
i reduction due to energy efficiency
peration maintenance of assets
echnica osses reduction

Distribution capacity deferra

i reduction due to dynamic pricing
ncreased competition in retai mar et
utage management based on societa a ue of ost
Generation capacity deferra
ransmission capacity deferra
44 utage management based on reduced customer
Pro ision of e p icit f e ibi ity ser ices
Air po ution particu ate matters, ,
asier access to photo o taic production
ther
 Everything sounds great, but...?

▪ Information sharing security

▪ How to actually encourage the end user to provide ancillary services
▪ Automated access
▪ Adequate education
▪ Without compromising comfort
▪ Greater benefit from large consumers - industry and commercial consumers
▪ Aggregation of smaller users
45 ▪ Vulnerable consumer
▪ Elderly users and users with special needs will bear higher electricity costs
 An example from Croatia

46
 Black tariff in Croatia

▪ DSO determines when electricity will be available to the end user

▪ It is mostly used for boilers, heating systems and devices where energy
consumption can be delayed
▪ Energy must be available for at least 8 hours during the day
▪ DSO must be able to directly control consumption
▪ The end user must have smart measuring devices

47
 France - electricity market

▪ Dynamic electricity prices:

▪ Basic option – constant prices
▪ Multi-tariff systems
▪ Tempo tariff (CPP prices)
▪ NEBEF mechanism
▪ Explicit demand response through
aggregators
▪ Block exchange
48
 France

▪ Balancing of the balance group

▪ Balance group leaders are responsible for balancing their group
▪ Two possibilities of participation:
▪ Self-balancing – participants are penalized/rewarded by the leader of the balancing group
▪ Block exchanges between other heads of balance groups through the so-called Block Exchange
Service
▪ Balancing the system
▪ Frequency services and voltage regulation
49 (primary and automatic secondary
reserve for voltage and frequency control)
▪ Active reserve – manual secondary and
tertiary reserve
 France is an example

50
 Flexible Power

51
 CrowdNet

▪ A virtual power plant in the Netherlands

▪ End users get a 35% lower price of solar panels and batteries
▪ For joint use of the battery with DSO, a minimum of 450 euros per year is
received

52
 California

▪ Demand response programs exist for all types of end consumers

▪ Programs are offered by both system operators and aggregators
▪ End users receive all the necessary information through the application, e-mail,
by sending a notification to their mobile phone or by direct call
▪ Various price signals, incentives, energy efficiency measures, discounts on a
certain part of the electricity bill

53
 Network tone frequency control (Ripple control)

▪ A superimposed high-frequency signal is added to the standard frequency level

of 50 Hz, which sends a direct signal to turn off individual devices
▪ Public street lighting, electric boilers and heaters
▪ Switzerland, Hungary, Czech Republic and Slovakia – consumption control
instrument to ensure system security

54
 New Zealand

▪ End users can track information about demand

response requests through the application
▪ They can make their offer to provide flexibility and
receive feedback if the offer is accepted
▪ After the flexibility is activated, end users receive a
notification about the success of the provided service
and how much they will be paid for the provided
service
55
 California CAISO

▪ Proxy Demand Response

▪ Independent service providers
▪ Participation in the markets of energy and auxiliary services
▪ Consumption reduction – load curtailment
▪ Proxy Demand Response – Load Shift Resource
▪ Shifting consumption
▪ Consumption reduction and consumption itself are measured separately
▪ The amount of electricity consumed is paid directly to the supplier, while the amount of
56 consumption reduction or consumption shift is paid directly by CAISO
▪ Reliability Demand Response Resource
▪ Reduction consumption in the emergency room moments
 Task 1
JK Rowling delighted her fans with information about the new Harry Potter book.
The publishing house that won the contract was given the task of publishing 540
books a day during a period of 20 days. Considering the difficulty of the task, it
will be done all day in 3 shifts. The publishing house has 60 printers that can all
work in parallel, and each of them consumes 1 kWh of electricity per hour.
Printing one book takes two hours and once the book starts printing, the process
cannot be interrupted. In addition to the specified consumption of the printer,
the publishing house must meet the basic consumption of 21 kWh of electricity
every hour during the day. What is the price of electricity for printing this new
book about a little wizard if the bookstore has dynamic electricity prices shown in
the table, and how much if the price is constant during the day and equals to 0.05
57 EUR/kWh?
 Hour Price EUR/MWh Consumption normal Printer 1 60 printers Total consumption Cost
1 38.7 21 1 60 81
2 37.9 21 1 60 81
3 36.9 21 1 60 81
4 36.9 21 1 60 81
5 39.97 21 1 60 81
6 47.49 21 1 60 81
7 54.97 21 1 60 81
8 55.96 21 1 60 81
9 54.99 21 0 0 21
10 54.94 21 1 60 81
11 54.54 21 1 60 81
12 53.23 21 1 60 81
13 46.58 21 1 60 81
14 40.5 21 1 60 81
15 48.07 21 1 60 81
16 55 21 0 0 21
17 56 21 0 0 21
58 18 56.94 21 0 0 21
19 75 21 0 0 21
20 72.89 21 0 0 21
21 51.09 21 1 60 81
22 43.59 21 1 60 81
23 54 21 1 60 81
24 38 21 1 60 81
 Hour Price EUR/MWh Consumption normal Printer 1 60 printers Total consumption Cost
1 38.7 21 1 60 81 3.13
2 37.9 21 1 60 81 3.07
3 36.9 21 1 60 81 2.99
4 36.9 21 1 60 81 2.99
5 39.97 21 1 60 81 3.24
6 47.49 21 1 60 81 3.85
7 54.97 21 1 60 81 4.45
8 55.96 21 1 60 81 4.53
9 54.99 21 0 0 21 1.15 Cost =
10 54.94 21 1 60 81 4.45
75.29 EUR
11 54.54 21 1 60 81 4.42
12 53.23 21 1 60 81 4.31
13 46.58 21 1 60 81 3.77
14 40.5 21 1 60 81 3.28
15 48.07 21 1 60 81 3.89
16 55 21 0 0 21 1.16
17 56 21 0 0 21 1.18
59 18 56.94 21 0 0 21 1.20
19 75 21 0 0 21 1.58
20 72.89 21 0 0 21 1.53
21 51.09 21 1 60 81 4.14
22 43.59 21 1 60 81 3.53
23 54 21 1 60 81 4.37
24 38 21 1 60 81 3.08
 Task 2
The aggregator of electric vehicles wants to calculate how much savings he can
achieve by optimizing the charging of electric vehicles. The aggregator manages a
fleet of 1,000 electric vehicles with identical technical characteristics and
behavioral principles. When the vehicles are connected to the charger, it is
possible to control the charging and discharging of the vehicle in G2V and V2G
mode, which actually enables arbitration. Each drive consumes 10 kWh of
electricity.
Technical parameters of the vehicle:
▪ Battery capacity 60 kWh
60 ▪ Inverter 8 kW
▪ Charging/discharging efficiency 100%
▪ Initial/final state of battery charge: 100% for a) question, 70% for c) question
Charger types:
▪ Home charger: 6 kW
▪ Charging station: 10 kW
 Continuation
The observed drivers of electric vehicles are hotel workers who work in two
shifts:
▪ Morning shift : they go to work at 5 am and return home at 10 am
▪ Evening shift: they go to work at 4 in the afternoon and return home at 9 in the evening
Each trip lasts 1 hour.
The following prices were observed:
▪ Low tariff: 17:00-4:59 30 EUR/MWh
▪ High tariff: 5:00-16:59 55 EUR/MWh
▪ What is the cost of charging the vehicle if we have:
61 ▪ Uncontrolled charging of the vehicle (initial/final state of charge is 100%)
▪ One-way controlled charging (initial/final state of charge is 100%)
▪ Two-way charging/discharging V2G (initial/final state of charge is 100%)
▪ Does the V2G mode bring savings?
▪ Calculate the total cost if there is a V2G mode of operation if the initial/final
 ? Thank you for your
attention!
? ?

62