Load shifting versus manual frequency reserve: Which one is more appealing to thermostatically controlled loads in Denmark?

Abstract

This paper investigates demand-side flexibility provision in two distinct forms of manual Frequency Restoration Reserve (mFRR) services and load shifting, and explores which one is financially more appealing to Thermostatically Controlled Loads (TCLs) in Denmark. While mFRR is an ancillary service required for the system and being bought by the system operator, load shifting is an individual act of the TCL in response to the variation of hourly electricity prices. Without loss of generalization, we consider a supermarket freezer as a representative TCL, and develop a grey-box model describing its temperature dynamics using real data from a supermarket in Denmark. Taking into account price and activation uncertainties, a stochastic mixed-integer linear program is formulated to maximize the flexibility value from the freezer. Examined on an ex-post simulation based on Danish spot and balancing market prices in 2022, load shifting shows to be almost as profitable as mFRR provision, although it could be more consequential for temperature deviations in the freezer. This indicates the need for regulatory measures by the Danish system operator to make the attraction of ancillary service provision more obvious for TCLs in comparison to the load shifting alternative.