Power system balancing with high renewable penetration : the potential of demand response

Abstract

This study investigated the ability of responsive demand to stabilize the electrical grid when intermittent renewable resources are present. The WILMAR stochastic unit commitment model was used to represent a version of the Danish electricity and heat system with an enhanced level of wind generation. The study found that demand response reduced the marginal operating cost of the electrical system 3%. Demand response reduced CO₂ /SO₂ emissions levels 3% by enabling 11% more generation of wind power. Demand resources representing 25% of nameplate wind power and priced at 150% of a gas turbine's marginal cost were a recommended combination that balanced maximum system improvement at minimal ratepayer impact. The system cost benefits of each study case enabled the calculation of a demand curve representing the system operator's willingness to pay fixed costs for capacity from the pool of operating savings. With demand response, wind generators increased profits, coal plants reduced profits slightly, and natural gas plant profit was cut to almost zero. With high levels of unpredictable renewable resources and limited ability to import power, demand response represents a promising technique to balance the grid at low cost.