Flexible Demand and Flexible Supply As Enablers of Variable Energy Integration
51 Pages Posted: 11 May 2017
Date Written: May 10, 2017
This paper analyzes the impact of interplay between demand response, wind penetration and hydropower usage in the hydro-dominated Nordic power market. Hydropower and demand response are considered as complements of wind power. This paper is the first to quantify the benefits from simultaneously optimizing demand response and energy storage when integrating wind power into an existing power system. Our results show that coordinating wind and hydropower productions is beneficial. Furthermore, this coordination becomes more efficient with more flexible demand. As results, thermal power capacity and emissions are reduced considerably since thermal capacity utilization is improved. Although wind power lowers the market prices, the resulting decreasing profits for non-wind producers may be compensated by promoting more flexible electricity demand. Thus, a part of the benefits for consumers may be shifted back to non-wind producers. Lastly, we show decreasing marginal system benefit from increasing real-time pricing adoption.
Keywords: variable renewable energy, flexibility, hydropower
JEL Classification: L94, C61, D22
Suggested Citation: Suggested Citation