A methodology to assess demand response benefits from a system perspective: A Dutch case study

AbstractTo support decision-making about the implementation of demand response, insight into the prospects and value creation is essential. As the potential benefits are diverse and distributed amongst various power system stakeholders, a system perspective is necessary for their assessment. This paper describes a methodology to model the long-term demand response benefits from a system perspective. To quantify the benefits both the energy market value and the grid value are assessed. In a liberalized power system these benefits can generally be assigned to the two main electric utilities, i.e., the energy supplier and the grid operator. The applicability of the developed approach is demonstrated using the Netherlands as a case study and a model developed from actual data from the Dutch power system. Within this model, different demand-response strategies are implemented to shape the flexible future load available for residential areas. The potential benefits of the following demand-response strategies are quantified: grid based, energy market based and energy market based with capacity constraints. The results show that from a system perspective, a demand-response strategy that is energy market based with capacity constraints is most effective in terms of realizing system benefits from residential flexibility