Provoking Residential Demand Response Through Variable Electricity Tariffs - A Model-Based Assessment for Municipal Energy Utilities

Abstract

With the suitable infrastructure of information and communication technologies in place, customers are able to perform demand response (DR), meaning that they can decrease or increase their electricity consumption in response to changes in their electricity tariff. In this research, different variable electricity tariffs are designed taking both customer and utility preferences into account. Subsequently, a model-based analysis on the basis of optimization model IRPopt (Integrated Resource Planning and Optimization) is carried out. Electricity customers are exposed to the designed tariffs in order to find out whether variable electricity tariffs are a suitable instrument for municipal energy utilities to exploit the potential laying in residential DR. Loads considered for DR in this work are those of selected electric household appliances and the loads of electric heat pumps. One major contribution of this work is that the assessment differentiates between different types of energy utilities, whose specific generation profiles are taken into account in the design of the variable tariffs. The results show that variable electricity tariffs have a small economic potential. However, customers only benefit if the design of the business model includes a proper compensation mechanism. In this context, successful business models require the direct cooperation of different municipal energy market actors. Furthermore, taking the specific generation profiles of municipal energy utilities into account in the design of variable electricity tariffs helps to increase the energy autonomy of municipalities.