A Comprehensive Market-Driven Approach to the Provision of Reserves and Balancing through Demand Response

Abstract

In recognition of the economies of scale, electricity markets are predominantly concentrated on the participation of the supply side. Notwithstanding the foregoing, the advancing enhancement of the communication and control infrastructure across all the levels of modern electricity networks serves as a pathway to the active participation of the electricity consumers. Synchronously, the ongoing growth of intermittent renewable generation, in response to the prominent energy and environmental challenges, highlights the value of operational flexibility.The potential of the demand side to contribute to the economic and reliable operation of modern power systems by providing operational flexibility is constantly evolving. In a deregulated market setting, the prime driver for the realization of such potential would be the benefit of private stake holders. Nevertheless, as electricity markets are designed to facilitate the continuous exchange of energy produced by the supply side, the consideration of a short-term modification in the volume of electricity consumed by the demand side as a tradable resource is not a straightforward process.In this direction, emphasis should be placed on the salient features of the inherent flexibility in the demand for electricity as well as on the market mechanisms enabling the integration of this resource in the operation of power systems. Acknowledging these issues, the present thesis addresses the value of demand-side flexibility within modern electricity markets through modelling the materialization of this resource via the interaction of the electricity market actors.As the means to provoke the flexible behaviour of the demand side is the operation of Demand Response programs, we analyze the synergy between the electricity consumers and a profit seeking Demand Response program operator through a bilevel stochastic optimization model. Moreover, we consider the competitiveness of demand-side flexibility in the electricity market. To that end, we develop novel adaptive agent models related to capitalizing on demand-side flexibility via active and passive Demand Response programs. In light of the salient features of demand-side flexibility, we also formulate a market framework for the efficient integration of this resource in the electricity market and establish the basis for the fair allocation of its value.

Date of Award	1 Aug 2012
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Joseph Mutale (Supervisor)