Abstract
During peak electricity demand periods, prices in wholesale markets can be up to nine times higher than during off-peak periods. This is because if a vast number of users is consuming electricity at the same time, power plants with higher greenhouse gas emissions and higher system costs are typically activated. In the UK, the residential sector is responsible for about one third of overall electricity demand and up to 60% of peak demand. This paper presents an analysis of the 2014–2015 Office for National Statistics National Time Use Survey with a view to derive an intrinsic flexibility index based on timing of residential electricity demand. It analyses how the intrinsic flexibility varies compared with wholesale electricity market prices. Findings show that spot prices and intrinsic flexibility to shift activities vary harmoniously throughout the day. Reflections are also drawn on the application of this research to work on demand side flexibility.
Highlights
Peaks in electricity demand bring about significantly negative environmental and economic impacts
This paper presents an analysis of the 2014–2015 Office for National Statistics National Time Use Survey with a view to derive an intrinsic flexibility index based on: how synchronised activities are within the family and with the rest of the country; how many activities requiring electricity we share with others; and how fragmented days are in terms of number and duration of electricity-related activities
The main economic approach to increase the flexibility of electricity demand consists of introducing dynamic tariffs to which end-users are supposed to respond by shifting consumption to different times of the day (Torriti et al 2011)
Summary
Peaks in electricity demand bring about significantly negative environmental and economic impacts. At times when there is no correlation and, for instance, the wholesale price is high, whereas the intrinsic flexibility index is low, the system’s need to flex is high (to reduce prices), but interventions are less likely to be successful at flexing demand. The second aim is more operational and can be framed as an exemplification of the flexibility index to understand how its implementation relates to electricity price variations. This is with a view to explore the potential synchronous and a-synchronous characteristics of available flexibility combined with price fluctuations in the spot market. The paper briefly reviews key concepts around price elasticity and flexibility (Sect. 2); describes the methodology and data (Sect. 3); presents findings on the intrinsic flexibility index estimates and on the analysis of settlement prices and intrinsic flexibility index discusses the potential applications of the intrinsic flexibility index (Sect. 4); and concludes (Sect. 5)
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