Benefits of DSM measures in the future Finnish energy system

Abstract

Increasing the share of renewable and nuclear energy has been some of the key ingredients in the Finnish energy and climate strategy for de-carbonising the energy mix. Integrating large shares of variable renewable energy generation to a system with a large share of inflexible generation, such as nuclear power, can however lead to a decrease in system efficiency as the availability of variable renewable energy and demand can be in mismatch, further leading only to sub-optimal economic dispatch of generation units. The focus of this paper is on demand shifting in the residential and commercial sector. We estimate the hourly flexible demand potential and model the management of this end-user demand-side resource according to availability of variable RES generation. Moreover, to analyse the implications of demand shifting on energy system level, we model the Finnish energy system in future scenarios with large amounts of wind power, photovoltaics and nuclear power. Results indicate that in most cases studied demand response can provide an efficient means to integrate RES, improve security of supply and reduce energy system costs.