Industrial Demand Side Management Research Articles

Flexibility from industrial demand-side management in net-zero sector-coupled national energy systems

National energy systems require flexibility to accommodate increasing amounts of variable renewable energy. This flexibility can be provided by demand-side management (DSM) from industry. However, the flexibility potential depends on the characteristics of each industrial process. The enormous diversity of industrial processes makes it challenging to evaluate the total flexibility provision from industry to sector-coupled energy systems. In this work, we quantify the maximum cost reductions due to industrial DSM in the net-zero sector-coupled Swiss energy system, and the relationship between cost reductions and various industrial process characteristics. We analyze the flexibility of industrial processes using a generic, process-agnostic model. Our results show that industrial DSM can reduce total energy system costs by up to 4.4%, corresponding to 20% of industry-related energy costs. The value of flexibility from industrial DSM depends not only on the process characteristics but also on the system’s flexibility alternatives, particularly for flexibility over seasonal time horizons. As one specific option for industrial DSM, we find that thermal energy storage (TES) technologies available today could realize between 28% and 61% of the maximum cost reductions from industrial DSM, making TES a promising DSM solution and showing that industrial DSM is an accessible and cost-effective flexibility option.

Physics-Based Modeling and Parameter Tracing for Industrial Demand-Side Management Applications: A Novel Approach

The transition to sustainable energy sources presents significant challenges for energy distribution and consumption systems. Specifically, the intermittent availability of renewable energy sources and the decreasing usage of fossil fuels pose challenges to energy flexibility and efficiency. An approach to tackle these challenges is demand-side management, aiming to adapt energy consumption and demand. A key requirement for demand-side management is the traceability of the energy flow among individual energy consumers. In recent years, advancements in industrial information and communication technology have provided additional potential for data acquisition. Complementary to acquired data, a physics-based modeling and analysis approach is proposed, which describes the energy consumption with physical parameters. This results in comprehensive options for monitoring actual energy consumption and planning future energy demand supporting energy efficiency and demand-response goals. To validate the proposed approach, a case study with a 3D printer covering approximately 110 h of active printing time is conducted. The medium-term study results indicate a consistent parameter trend over time, suggesting its conceptual suitability for industrial application. The approach helps to monitor energy efficiency among manufacturing assets by identifying peak loads and consumption hotspots, and provides parameters to estimate energy consumption of manufacturing processes. Results indicate up to 50% energy savings when switching the printing material and indicate further potentials.

For better or for worse? On the economic and ecologic value of industrial demand side management in constrained electricity grids

Electricity systems are in dire need to scale up volatile decentralized renewable electricity supply (RES), reducing the dependency on fossil fuels and drastically cutting carbon emissions. Industrial demand side management (DSM) is a key enabler of the energy transition, as it allows to align large shares of electricity consumption with (renewable) supply. We present a short-term market model to evaluate the economic value (i.e., reduced system costs) and ecologic value (i.e., reduced carbon emissions) of industrial DSM within a constrained electricity grid, incorporating conventional electricity supply (flexibility) and RES. A model evaluation yields four key findings: (1) Grid-capacity constraints determine whether and to what extent industrial DSM may contribute economic and ecologic value. (2) Both the economic and ecologic value of industrial DSM are determined by the location within a capacity-constrained electricity grid. (3) DSM might even increase carbon emissions depending on local merit-orders. (4) Carbon emission pricing may resolve a potential conflict between ecologic and economic DSM-value maximization. Based on these findings, energy policy should (i) establish an electricity market design that provides sufficient local price signals for industrial DSM and (ii) ensure that local merit-orders incentivize industrial DSM to contribute both economic and ecologic value based on appropriate carbon prices.

Demand Side Management in Industrial, Commercial, and Residential Sectors: A Review of Constraints and Considerations

Demand Side Management (DSM) is a cost-effective approach to managing electricity networks, aimed at reducing capacity requirements and costs, increasing the penetration of renewable generation, and reducing power system emissions. This review article explores the distinctive characteristics of electricity demand in the industrial, commercial, and residential sectors, and their relationship to successful implementation of DSM. The constraints and considerations for DSM are characterized as technical, economic, and behavioral factors, such as process requirements, business operation constraints, and consumer decisions, respectively. By considering all three types of factors and their impacts in each sector, this review contributes novel insights that can inform the future implementation of DSM. DSM in the industrial and commercial sectors is found to be primarily constrained by technical considerations, while DSM in the commercial sector is also subject to economic constraints. Conversely, residential demand is found to be primarily constrained by human behavior and outcomes, highly variable, and the largest contributor to peak demand. This review identifies sector-specific opportunities to enhance DSM uptake. Industrial DSM uptake will benefit from technological and process improvements; commercial DSM uptake can benefit from enhanced economic incentivization; and residential DSM uptake can benefit from improved understanding of the interactions between human behavior, human outcomes, and energy use. Finally, this review investigates behavioral models and concludes that agent-based models are best suited for integrating these interactions into energy models, thereby driving the uptake of DSM, particularly in the important residential sector.

How flexible are energy flexibilities? Developing a flexibility score for revenue and risk analysis in industrial demand-side management

With rising and increasingly volatile energy prices, demand-side management (DSM) is becoming attractive within industry to optimize flexible electricity demand and to remain competitive. Despite economic and ecological benefits for companies, DSM implementation is not yet widespread. High effort in flexibility audits and complex optimization models to quantify DSM’s economic potentials represent initial barriers in practice, raising the question whether there is a simple way to analyze economic DSM potential as an initial indicator of successful DSM implementation that requires little data on flexibility characteristics. To address this need, this study develops a flexibility score that describes the degrees of freedom of individual energy flexibility measures (EFMs), i.e. how flexible a flexibility measure is. The flexibility score is tested and validated in a risk-return analysis on 46 real-world industrial EFMs from Germany optimized with integer linear programming (ILP). Analyzing Germany’s Day-Ahead and Intraday markets, the results show an increase in expected revenues and a simultaneous decrease in revenue risk with an increasing flexibility score, outlining DSM investments as attractive. Due to its ease of use, we see industrial companies, aggregators, energy service providers, and (energy) consultancy agencies as target users of the flexibility score. Policymakers can use the flexibility score to identify and design subsidies for energy flexibility investments.

Comparative life cycle assessment of industrial demand-side management via operational optimization

Demand-side management (DSM) is a promising option to synchronize electricity demand with volatile electricity generation by renewable energy sources. For a comprehensive assessment of the environmental impacts of DSM, the holistic method of life cycle assessment (LCA) can be applied. However, not all purposes of industrial DSM are consistently defined in the functional unit, focusing either on the products or the flexible electricity consumption. We develop a method to jointly consider the products and the flexible electricity consumption in the functional unit of industrial DSM. To ensure a consistent LCA, we compare the DSM system with a reference system that provides the same functionality by operating the industrial process at steady state and utilizing electricity storage technologies to provide flexibility. We apply the proposed method on the switchable chlor-alkali electrolysis. The results show that the environmental impacts of applying DSM on the switchable electrolysis are comparable to integrating electricity storage.

Investigation of Technical Feasibility of Hybrid Compressed Air Cogeneration Systems under Energy-Flexible Operation

The study investigates the effects of energy-flexible operation of hybrid compressed air systems in production processes with a view to efficiency and energy consumption. As energy costs become increasingly important in the economic considerations of industrial companies, integrating renewable energies necessitates the implementation of demand-side management capabilities to overcome the problem of intermittent energy production. One promising solution is hybridization, enabling energy systems to utilize multiple forms of energy. In the context of hybrid compressed air systems (CAS), it enables the use of gas, for example natural gas, hydrogen gas or biogas, and electricity for compressed air production, thus substituting electricity or gas demand on short- and long-term horizons. Advantages of such systems include the provision of energy flexibility as well as the variable supply of compressed air, process heat, and electricity through recuperation in the electric motor according to production plant consumption. However, the effects of energy-flexible operation on energy consumption and thus on the system's efficiency still needs to be fully understood. To this end, a demonstrator of a hybrid CAS cogeneration plant was built. Specific scenarios are used to analyze the effect on energy efficiency and the feasibility of energy-flexible operation. Despite slight reductions in efficiency during operation, the feasibility of operation was validated and valuable insights on further improvement were gained. With a view to the expected rising volatility in energy production, the hybrid approach represents an efficient, climate-friendly, energy-flexible, and resilient solution for compressed air production that could assist in expanding industrial demand-side management.

Industrial Demand-Side Management by Means of Differential Evolution Considering Energy Price and Labour Cost

In the context of the high dependency on fossil fuels, the strong efforts aiming to shift towards a more sustainable world are having significant economic and political impacts. The electricity market is now encouraging prosumers to consume their own production, and thus reduce grid exchanges. Self-consumption can be increased using storage systems or rescheduling the loads. This effort involves not only residential prosumers but also industrial ones. The rescheduling process is an optimisation problem that can be effectively solved with evolutionary algorithms (EAs). In this paper, a specific procedure for bridging demand-side management from the theoretical application to a practical industrial scenario was introduced. In particular, the toroidal correction was used in the differential evolution with the aim of preventing the local minima worsening the effectiveness of the proposed method. Moreover, to achieve reasonable solutions, two different cost contributions have been considered: the energy cost and the labour cost. The method was tested on real data from a historical textile factory, Ratti S.p.A. Due to the nature of the loads, the design variables were the starting time of the 30 shiftable loads. The application of this procedure achieves a reduction in the total cost of approximately 99,500 EUR/year.

Simulation Modeling for Energy-Flexible Manufacturing: Pitfalls and How to Avoid Them

Due to the high share of industry in total electricity consumption, industrial demand-side management can make a relevant contribution to the stability of power systems. At the same time, companies get the opportunity to reduce their electricity procurement costs by taking advantage of increasingly fluctuating prices on short-term electricity markets, the provision of system services on balancing power markets, or by increasing the share of their own consumption from on-site generated renewable energy. Demand-side management requires the ability to react flexibly to the power supply situation without negatively affecting production targets. It also means that the management and operation of production must consider not only production-related parameters but also parameters of energy availability, which further increase the complexity of decision-making. Although simulation studies are a recognized tool for supporting decision-making processes in production and logistics, the simultaneous simulation of material and energy flows has so far been limited mainly to issues of energy efficiency as opposed to energy flexibility, where application-oriented experience is still limited. We assume that the consideration of energy flexibility in the simulation of manufacturing systems will amplify already known pitfalls in conducting simulation studies. Based on five representative industrial use cases, this article provides practitioners with application-oriented experiences of the coupling of energy and material flows in simulation modeling of energy-flexible manufacturing, identifies challenges in the simulation of energy-flexible production systems, and proposes approaches to face these challenges. Seven pitfalls that pose a particular challenge in simulating energy-flexible manufacturing have been identified, and possible solutions and measures for avoiding them are shown. It has been found that, among other things, consistent management of all parties involved, early clarification of energy-related, logistical, and resulting technical requirements for models and software, as well as the application of suitable methods for validation and verification are central to avoiding these pitfalls. The identification and characterization of challenges and the derivation of recommendations for coping with them can raise awareness of typical pitfalls. This paper thus helps to ensure that simulation studies of energy-flexible production systems can be carried out more efficiently in the future.

For Better or for Worse? On the Economic and Ecologic Value of Industrial Demand Side Management in Constrained Electricity Grids

For Better or for Worse? On the Economic and Ecologic Value of Industrial Demand Side Management in Constrained Electricity Grids

Planning and Scheduling for Industrial Demand-Side Management: State of the Art, Opportunities and Challenges under Integration of Energy Internet and Industrial Internet

Industrial power has a large load base and considerable adjustment potential. Enterprises with a high degree of automation and adjustable potential can automatically adjust the production status according to the peak load, frequency of the power grid and the demand of new energy consumption, so as to realize automatic demand response. This paper analyzes the opportunities and challenges of industrial demand response under the integration of Industrial Internet and Energy Internet. At the same time, the development direction of industrial demand response under the new situation, such as comprehensive demand response, adjustable load resources and other technical and policy aspects are prospected.

Comparison of the Effects of Industrial Demand Side Management and Other Flexibilities on the Performance of the Energy System

In order to ensure security of supply in a future energy system with a high share of volatile electricity generation, flexibility technologies are needed. Industrial demand-side management ranks as one of the most efficient flexibility options. This paper analyses the effect of the integration of industrial demand-side management through the flexibilisation of aluminium electrolysis and other flexibilities of the electricity system and adjacent sectors. The additional flexibility options include electricity storage, heat storage in district heating networks, controlled charging of electric vehicles, and buffer storage in hydrogen electrolysis. The utilisation of the flexibilities is modelled in different settings with an increasing share of renewable energies, applying a dispatch model. This paper compares which contributions the different flexibilities can make to emission reduction, avoidance of curtailment, and reduction of fuel and CO2 costs, and which circumstances contribute to a decrease or increase of overall emissions with additional flexibilities. The analysis stresses the rising importance of flexibilities in an energy system based on increasing shares of renewable electricity generation, and shows that flexibilities are generally suited to reduce carbon emissions. It is presented that the relative contribution towards the reduction of curtailment and costs of flexibilisation of aluminium electrolysis are high, whereby the absolute effect is small compared to the other options due to the limited number of available processes.

Do investments in flexibility enhance sustainability? A simulative study considering the German electricity sector

AbstractCurrent research concerning industrial demand side management primarily focuses on monetary aspects. Herein, we extend this perspective by assessing whether economically driven measures increasing the flexibility also result in reduced contributions to the residual load. For this purpose, we conduct a simulative study using historic and projected time series for the German electricity sector. First, Fourier analysis are performed to show that the main oscillation in the electricity price time series has a period length of 12 hr, whereas the renewable generation is primarily characterized by an oscillation with a period length of 24 hr. Second, a generic process model with capabilities for load shiftings is used to evaluate how the fluctuation patterns can be exploited via scheduling optimizations. Most importantly, our results demonstrate that prevalent price fluctuations prevent adequate monetary incentives for providing storage capacities for bridging up to 24 hr, which are desired for reducing the residual load.

Industrial Demand Side Management of a Steel Plant Considering Alternative Power Modes and Electrode Replacement

As a major energy consumer, steel plants can help stabilize the power grid by shifting production from periods with high demand. Electric arc furnaces can be operated at different power levels, affecting the energy efficiency, the duration of melting tasks, and the rate of electrode degradation, which has previously been neglected. We thus propose a new mixed-integer linear programming (MILP) formulation for optimal scheduling under time-of-use electricity pricing that captures the tradeoffs involved. It relies on the resource-task network (RTN) for modeling processing tasks with variable electrode mass depletion and replacement tasks that regenerate the mass. Results for an industrial case study show that the high-power mode, which allows for faster execution and to fit more tasks in low-price periods but is the least energy-efficient and consumes the largest mass of electrode, is mostly avoided. It indicates that electrode replacement plays an important role in total cost minimization.

Statistical Energy Information and Analysis of Pakistan Economic Corridor Based on Strengths, Availabilities, and Future Roadmap

In Pakistan, the performance of conventional electrical grids is inefficient, resulting in severe energy crises. To overcome the alarming challenges persisting in the energy grids, Pakistan must focus on system protection, grid reliability, distribution and transmission, and power quality. The inefficiencies in grid protection and management signify an overall problematic energy scenario. The solutions to these problems include the improvement of domestic, commercial, and industrial demand-side management and the reduction in distribution network losses. A smart grid (SG) is a critical requirement as it can overcome the shortcomings of the existing grid owing to its promising features, enhanced consumer empowerment, utmost security; efficient and optimized energy flow; and demand-supply management. Thus, the SG is essential to overcome the energy crisis in Pakistan and achieve the standards of other developed nations in the energy sector. This study aims to highlight the significant prospects of SGs within Pakistan with the key objectives of its availability requirements. We compare the energy scenario in Pakistan with that of other countries and recommend various aspects that require improvement through SG implementation. Additionally, we discuss the incorporation of renewable energy resources and present a market analysis regarding SGs to illustrate the SG scenario and its implementation in Pakistan. Moreover, we analyze and evaluate detailed taxonomies of energy generation, energy projects, renewable energy assessment, power market trends in Pakistan, and the basic requirements of SGs. Furthermore, a critical analysis of the energy sector in Pakistan is elaborated, which describes the possibilities, requirements, and strengths pertaining to the transformation of the modern electric grid with respect to the China-Pakistan Economic Corridor. Thus, we believe that our work is more versatile in improving the energy system of Pakistan for the implementation of the SG.

Role of Energy Efficiency and Conservation Including Demand Side Management for Sustainable Development in India

Energy is used to provide cost-effective services meet the objectives of promoting sustainable development. The importance of Energy Efficiency and Conservation (EE and EC) is to conserve depleting energy resources. Energy efficiency in India has been increasing which has led the Government of India through the Energy Conservation Act (ECA) and the Bureau of Energy Efficiency (BEE) to begin several programs. Demand Side Management (DSM) and Energy Efficiency and Conservation are improving the economic growth of Indian utilities.DSM also aimed at promoting the installation and use of energy efficient equipment that consume less power having good quality of output. Energy efficiency is important for sustainable future. Demand Side Management including Demand Response (DR) Activity is utilized to limit the peak electricity demand. DSM helps grid operators to act as virtual power plants and power the utilities to transmit energy when needed through demand response measures. Demand Response (DR) measures can be adapted for a industrial and commercial facility that includes turning off air conditioning, lighting, pumps, and other non-essential equipment. Demand Response is a Demand Side Management (DSM) method in which the end users of electricity are encouraged to take part in dropping the peak load on the system by altering their normal energy consumption schedule. The basic objective of the Agriculture, Municipal and Industrial Demand Side Management (DSM) programmes are to improve the overall energy efficiency of the SLDC (State Load Dispatch Centre) and Electricity Grids which could lead to substantial savings in the electricity consumption, resulting in cost reduction and savings. The target of energy saving can be achieved by implementing acts and policies which leads to state wise DSM Regulations by Regulatory Commissions to the State Power Utilities. The Role of DSM and Energy Efficiency including conservation can fulfill the dreams projects electricity demand in Smart Cities. The Role of State Electricity Regulatory Commissions and Forum of Regulators are very important to make India’s electricity demand in future.

Economic potential of industrial demand side management in pulp and paper industry

Abstract Increasing levels of variable renewable energy require additional flexible resources in the global energy system. In countries with energy-intensive industries, flexibility may be increased through industrial demand side management (IDSM). In most studies, the potential of IDSM is estimated from a technical or theoretical viewpoint. However, IDSM capacity is only utilized if the industry finds it profitable, and thus the economic potential should also be assessed. The focus of this paper is on the intra-day IDSM potential of a paper mill site that is active in the Nordic power market. An optimization model is built to estimate the costs that occur when the paper mill executes regulating power bids, if the original production schedule has been optimized against a spot price forecast. The costs are estimated for different sizes of bids and a marginal cost curve is provided for pricing them. Using this marginal cost curve, the market potential of the case mill site is assessed. It is found that this potential is greatly influenced by the costs of executing regulating power bids. The results indicate that transmission system operators and policy makers should account for economic factors when assessing the potential of market based IDSM.

Cost and carbon reductions from industrial demand-side management: Study of potential savings at a cement plant

Demand-side management (DSM) has the potential to reduce electricity costs and the carbon emissions associated with electricity use for industrial consumers. It also has an important role to play in integrating variable forms of generation, such as wind and solar, into the grid. This will be a key part of any grid decarbonisation strategy. This paper describes a method that can be used to develop a new production schedule for a wide range of manufacturing facilities. The new schedule minimises either electricity costs or electricity-derived CO2 emissions. It does so by rescheduling production to low cost or low carbon periods, without loss of overall production, within the constraints of available inventory storage. A case study of a single cement plant in the UK was performed in order to determine the potential benefits of increased load-shifting DSM using this method. The alternative production scheduled showed the potential to decrease electricity costs by 4.2%. Scaled to values from a typical plant this would lead to a cost saving of £350,000, a substantial saving. A schedule optimised to minimise carbon emissions would save an estimated 2000 tonnes per year of CO2, a 4% decrease in electricity-derived emissions. It was also observed that the actual electricity consumption of the plant was considerably higher than the minimum consumption predicted by the model. This could indicate potential for significant savings in both cost and CO2 due to improvements in energy efficiency. The potential savings from DSM doubled when the prices passed to the plant were replaced with a price that varied in proportion to the wholesale cost of electricity. This indicates that a potential mutual benefit exists for both industrial consumers and electricity generators by passing on more of the variation in price. A larger share of generation from wind and solar will also lead to increased variation in prices and grid carbon intensity in future. The value of applying the method described in this paper is therefore likely to increase further in future.

Demand side management in power grid enterprise control: A comparison of industrial & social welfare approaches

Despite the recognized importance of demand side management (DSM) for mitigating the impact of variable energy resources and reducing the system costs, the academic and industrial literature have taken divergent approaches to DSM implementation. The prequel to this paper has demonstrated that the netload baseline inflation – a feature particular to the industrial DSM unit commitment formulation – leads to higher and costlier day-ahead scheduling compared to the academic social welfare method. This paper now expands this analysis from a single optimization problem to the full power grid enterprise control with its multiple control layers at their associated time scales. These include unit commitment, economic dispatch and regulation services. It compares the two DSM formulations and quantifies the technical and economic impacts of industrial baseline errors in the day-ahead and real-time markets. The paper concludes that the presence of baseline errors – present only in the industrial model – leads to a cascade of additional system imbalances and costs as compared to the social welfare model. A baseline error introduced in the unit commitment problem will increase costs not just in the day-ahead market, but will also introduce a greater netload error residual in the real-time market causing additional cost and imbalances. These imbalances if left unmitigated degrade system reliability or otherwise require costly regulating reserves to achieve the same performance. An additional baseline error introduced in the economic dispatch further compounds this cascading effect with additional costs in the real-time market, amplified downstream imbalances, and further regulation capacity for its mitigation.

Enterprise-wide optimization for industrial demand side management: Fundamentals, advances, and perspectives

The active management of electricity demand, also referred to as demand side management (DSM), has been recognized as an effective approach to improving power grid performance and consumer benefits. Being large electricity consumers, the power-intensive process industries play a key role in DSM. In particular, enterprise-wide optimization (EWO) for industrial DSM has emerged as a major area of interest for both researchers and practitioners. In this work, we introduce the reader to the fundamentals of power system economics, provide a definition of DSM that reflects more strongly the consumer's perspective, and present a comprehensive review of existing works on EWO for industrial DSM. The review is organized into four parts, which correspond to the four main challenges that we identify as: (1) accurate modeling of operational flexibility, (2) integration of production and energy management, (3) decision-making across multiple time and space scales, and (4) optimization under uncertainty. Finally, we highlight research gaps and future opportunities in this area.