Demand Flexibility for the Simultaneous Provision of Multiple Services : Tapping the Potential of Controllable Electric Loads for Frequency Reserves and Energy Arbitrage

Abstract: Power systems with increasing shares of renewable energy sources require sufficient flexibility sources. One source of flexibility for future power systems is constituted by flexible electric loads. The concept of demand response captures the utilization of demand side flexibility to provide services to the power system. To efficiently exploit demand side flexibility, the need for, the potential of, and means to provide flexibility need to be quantified. This thesis provides an estimate of the need for flexibility, the potential of demand side flexibility, and, above all, the means of tapping the flexibility from controllable electric loads.For a demand response provider, the most economic means of providing flexibility in wholesale electricity markets is to participate in several markets simultaneously and thereby provide multiple services. With a focus on the Nordic electricity markets, the simultaneous provision of energy arbitrage and frequency reserves poses as the most economic market portfolio for a demand response provider with storage type assets.Specifically, the methods developed in this thesis model a risk-averse demand response provider that aims to maximize its profit on the day-ahead by placing bids on the energy and frequency reserve markets.The operational business of a demand response provider is illustrated by stochastic optimization of day-ahead bids under uncertainty from prices, temperatures, behavior, and model error.A general virtual battery model for simultaneous bidding in multiple day-ahead markets is developed for three applications; Thermostatically controlled loads (TCL), electric vehicles (EV), and a pulp and paper mill (PPM). The models can be used to assess the flexibility potential that a demand response provider can supply in a market based procurement of energy and reserves.Through application of the models to power system, price, temperature, and load data, the power and energy flexibility of the three studied load types are quantified.This thesis contributes to the field of demand response research by providing decision support tools for demand response providers that participate in energy and frequency reserve (FCR-N) markets.The main focus of the developed algorithms is to facilitate optimal day-ahead bids for a risk-averse demand response provider under various sources of uncertainty. Additionally, the sensitivity to market timing, such as lead time and contract period, is investigated.A significant potential of approximately 2.0 GW FCR-N capacity and 15.0 GWh energy flexibility is found in the Swedish power system, that can be exploited given the necessary communication infrastructure. The amount of flexibility, as well as the profitability of a demand response provider, is highest with short lead times and contract periods.