Industrial consumers\u2019 electricity market participation options: a case study of an industrial cooling process in Denmark

Nicolas Fatras,Zheng Ma,Bo Nørregaard Jørgensen

doi:10.1186/s42162-021-00165-5

Abstract

In a deregulated market context, industrial consumers often have multiple market participation options available to bid their flexible consumption in electricity markets and thereby reduce their electricity bill. Yet most participation strategies for demand response are developed in a fixed and predefined set of submarkets. Meanwhile, little literature has compared multiple market options for market participants. Therefore, this paper proposes a comparative approach between available market options to evaluate savings from different market participation options. More specifically, this study implements an optimisation program in Python to investigate the impacts of changes in an industrial process’ flexibility on savings with different market participation options. The optimisation program is tested with a case study of an industrial cooling process in three Danish submarkets (day-ahead, intraday, and regulating power markets). The market participation options are formed by different combinations of these three submarkets, and the type and amount of process flexibility are varied by changing time and load constraints in the optimisation program. The results show that bidding in market options with multiple submarkets yields higher savings than single-market bidding, but that increases in available flexibility impact savings in each market option differently. Increased flexibility will only bring additional savings if it allows to take further advantage of price variations in a market option. Additionally, increases in savings with flexibility depend on the considered type of flexibility. These changes in relative savings between market options at each flexibility level imply that the optimal market option is not a static choice for a process with variable operating conditions. The optimal market option for an industrial consumer depends not only on market price signals, but also on the type and amount of available flexibility.

Highlights

Demand response is defined as “a shift of electricity usage in response to market price signals or certain requests” (Ma et al 2017a)
Compared to commercial and residential electricity consumers (Ma et al 2017b; Ma et al 2016a), industrial consumers have been identified to have considerable flexibility (Paulus and Borggrefe 2011; Lund et al 2015; Shoreh et al 2016), which can be activated at predefined times
Industrial consumers have offered this flexibility in electricity markets for example through compensation schemes for forced load shedding (Nolan and O’Malley 2015). (Samad and Kiliccote 2012) underlines that much more flexibility could be unlocked from industrial consumers by actively participating in electricity markets on a more continuous basis through demand response

Summary

Introduction

Demand response is defined as “a shift of electricity usage in response to market price signals or certain requests” (Ma et al 2017a). In many countries such as Denmark, the liberalisation of electricity markets has been accompanied by an increasing number of submarkets These submarkets serve different purposes, such as day-ahead scheduling of supply and demand (Energinet 2007), frequency stability (Energinet 2021a), schedule adjustment to forecast changes (IRENA 2017), etc. Since demand response consists in shifting energy consumption in time, the level of demand response flexibility depends on the combination of time-based flexibility and load-based flexibility.

Methods

Results

Conclusion