Value and Granularity of ICT and Smart Meter Data in Demand Response Systems

38 Pages Posted: 5 Aug 2018

Date Written: October 19, 2015

Abstract

The large-scale integration of intermittent resources of power generation leads to unprecedented fluctuations on the supply side. An electricity retailer can tackle these challenges by pursuing strategies of flexible load shifting-so-called demand response mechanisms. This work addresses the associated trade-off between ICT deployment and economic benefits. The ICT design of a demand response system serves as the basis of a cost-value model, which incorporates all relevant cost components and compares them to the expected savings of an electricity retailer. Our analysis is based on a typical German electricity retailer to determine the optimal read-out frequency of smart meters. For our set of parameters, a positive information value of smart meter read-outs is achieved within an interval of 21 to 57 minutes regarding variable costs. Electricity retailers can achieve a profitable setting by restricting smart meter roll-out to large customers.

Keywords: Demand Response\Sep Load Shifting; Smart Meters; Electricity Markets; Information Granularity; Business Models

Suggested Citation

Feuerriegel, Stefan and Bodenbenner, Philipp and Neumann, Dirk, Value and Granularity of ICT and Smart Meter Data in Demand Response Systems (October 19, 2015). Energy Economics, Vol. 54, 2016. Available at SSRN: https://ssrn.com/abstract=3215398

Stefan Feuerriegel (Contact Author)

ETH Zürich ( email )

Weinbergstr. 56/58
Zürich, 8092
Switzerland

HOME PAGE: http://www.mis.ethz.ch/

Philipp Bodenbenner

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

Dirk Neumann

University of Freiburg ( email )

Albert-Ludwigs-Universität Freiburg, Wirtscha.inf.
Kollegiengebäude II, Platz der Alten Synagoge
Freiburg im Breisgau, 79098
Germany

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