On the Impact of Flexibility on Demand-Side Management: Understanding the Need for Consumer-Oriented Demand Response Programs

Abstract

While demand response programs inherently depend on consumer acceptance in order to be successful, consumer behavior is often overlooked when designing such programs. This paper addresses the impact of consumer flexibility in terms of appliance use on the success of a demand response program, measured through the overall grid stability assessed by the demand’s peak-to-average ratio. We employ a bootstrapping approach to simulate energy communities from real-life consumer data and implement a state-of-the-art demand response system. Results suggest that higher consumer flexibility under real-time energy tariffs implies higher degrees of grid stability, with real-time pricing decreasing the average peak-to-average ratio by 4.6% compared to time-of-use tariff and with highly flexible consumers showing a 23% lower peak-to-average ratio than regular consumers on average. Yet, it is possible for higher flexibility to be detrimental to grid stability by increasing the peak-to-average ratio under a time-of-use tariff. This result highlights the importance of understanding the interplay between different factors that influence energy consumer behavior, a research stream that has been under investigated thus far.