Demand Response Strategy for Optimal Formulation of Flexibility Services

Demand Response (DR) gains widespread support in the EU, as reflected in regulatory initiatives that encourage its market uptake and in the numerous pilot deployments that investigate its impact and acceptance. DR facilitates the cost-efficient integration of renewable energy sources and can contribute on reduced CO2 emissions. Also, it is beneficial for the electricity users, offering them financial incentives for reshaping their electricity consumption pattern. A key player in the realization of DR is the DR Aggregator. To accomplish its business objectives, this stakeholder needs ICT tools that support forecasting of the amount and flexibility of consumption, optimal planning of the flexibility of aggregated assets, baseline calculation and participation verification for settlement and billing purposes, and strategic positioning of the aggregated flexibility in the markets. Much of the innovation of these tools is focused on the components that analyze the flexibility portfolio and dynamically calculate proper incentives that ensure profitability for the DR Aggregator. This paper presents our approach for a Demand Response Management System and details the devised aggregated flexibility forecasting algorithms. It also presents a policy for optimal allocation of load curtailment/enhancement targets to DR programs and enrolled customers and analyses the rationale behind this policy