The role of demand side management for the system integration of renewable energies

Abstract

One possibility to facilitate system integration of renewable energy sources (RES) is Demand Side Management (DSM). The availability of the DSM potential varies according to the season and hour of the day as the demand of most DSM-applications depend on the ambient temperature and/or time of day. In addition, the dispatch of DSM-applications is restricted by technical constraints, e.g. shifting time. For these reasons, the flexibility DSM can provide to the electricity system is limited. One objective of this paper is therefore, to investigate the effect of DSM on the system integration of RES. The results indicate that DSM changes the shape of the residual load curve and decreases both, RES oversupply and curtailment. However, load shifting applications can only balance short term fluctuations, while load increase technologies facilitates the integration of high amounts of RES oversupply, which occurs over several hours and days. Changes of the residual load curve directly affect electricity prices. On the one hand, the number of hours with high prices decrease. On the other hand, prices in times with low residual load increase. These changes, caused by DSM, directly affect the market value of RES plants. In most cases, DSM leads to higher market values due to its price-rising effect in times with low residual load. However, if only load shifting and load shedding is considered, the smoothing-effect of peak prices is higher, than the rising effect of base load prices. As a result, the average electricity price and the market value of wind plants (onshore and offshore) declines. Nevertheless, DSM is an important flexibility option to facilitate system integration of RES.