1. Demand Response – A New Option for Wind Integration ?
Demand Response for Wind Integration
Demand Response – A New Option for Wind Integration ?
Marian Klobasa, Dr. Mario Ragwitz Fraunhofer Institute for Systems and Innovation Research
European Wind Energy Conference 2006
Athens, 2. March 2006
Fraunhofer ISI, March 2006

2. Demand Response for Wind Integration
Outline
Motivation for Demand Response
Potentials for Demand Response
Simulation of Wind Energy, Electricity System and Demand
Impacts of Wind Fluctuation on Electricity Systems
Fraunhofer ISI, March 2006

3. Benefits of Demand Response?
Demand Response for Wind Integration
Benefits of Demand Response?
Improving of system reliability
Peak load and balancing power can be reduced
Efficient electricity use by increased transparency
Reduction of price peaks and lower price volatility
Increase of short term price elasticity and improvement of market-clearing
Better market functioning
Reduced risks for market actors
Use of demand response as an existing resource might need lower investments than new generation capacity
Studies gave evidence of substantial economical and technical potentials
Demand response increases the possibilities for wind integration when balance between supply and demand is tightening
Fraunhofer ISI, March 2006

4. Increased Elasticity can reduce Electricity Prices
Demand Response for Wind Integration
Increased Elasticity can reduce Electricity Prices
€/MWh
MWh/h
Supply Curve
Demand Curve
Fraunhofer ISI, March 2006

5. Demand Response for Wind Integration
Realistic Option?
Experiences from Scandinavia and Germany
24 Jan 2000 (Price peaks up to 400 €/MWh)
Demand response in Sweden MW, in Norway MW
5 Feb 2001 (Price peaks 240 €/MWh, 9 hours over 100 €/MWh)
DR in Sweden up to 700 MW, in Norway up to 500 MW
Winter 2002/03 (December-price level 90 €/MWh)
Nordel: DR in Norway 800 MW, in Sweden 200 MW
ECON: DR in Norway MW
DR in Germany (2005): 200 MW contracted by SaarEnergie for minute reserve market
Source: FinGrid, SaarEnergie
Fraunhofer ISI, March 2006

6. Demand Response for Wind Integration
Outline
Motivation for Demand Response
Potentials for Demand Response
Simulation of Wind Energy, Electricity System and Demand
Impacts of Wind Fluctuation on Electricity Systems
Fraunhofer ISI, March 2006

7. Potential for demand response
Demand Response for Wind Integration
Potential for demand response
Sector
Appliances
Electricity Demand
[TWh]
Demand Response
[%]
Max. power shift [MW]
Basic Chemical
Electrolysis
6,6 67
580
Basic Metal
Electric Arc Furnace
6,8 50
400
Non-ferrous Metal
10,5 25
300
Pulp & Paper
Pulper, Refiner, Stock Preparation
11,9 16
240
Food Retail
Cooling devices
6,3 33
Food Industry
Cold storage, Process cooling 5
325
Residential
Cooling and freezing
18,6
780
Total
65,7
3025
Fraunhofer ISI, March 2006

8. Example steel production: electric arc furnace
Demand Response for Wind Integration
Example steel production: electric arc furnace
Typical batch process
Tap to tap time: 45 minutes
Power Supply: 100 MW
Capacity: 200 tons
Yearly production 200 t furnace: 1,5 Mio. tons
Steel price: 320 €/t (2003), > 500 €/t (2005)
Turn over: 500 – 700 Mio. €
Additional turn over in balancing market: 2,5 Mio. €
Price for balancing power: 70 €/MW per day
Price for balancing energy: 180 €/MWh
Source: Stahl-Online
Fraunhofer ISI, March 2006

9. Technical potential for demand response
Demand Response for Wind Integration
Technical potential for demand response
Additional potential:
Tertiary sector: GW
Refrigeration
Air conditioning
Residential sector: up to 9 GW
Space heating, warm water
other
hours
Fraunhofer ISI, March 2006

10. Prerequisites for demand response
Demand Response for Wind Integration
Prerequisites for demand response
Technology: Adoption of existing I&C technology for demand response – innovation of I&C technologies is main driver for system optimisation.
Development of suitable tariffs and business models (including extension of intraday markets).
Consideration of customer behaviour, potential benefits and risk for electricity traders.
Adoption of new demand response business option by energy and general management in industrial companies.
Fraunhofer ISI, March 2006

11. Demand Response for Wind Integration
Outline
Motivation for Demand Response
Potentials for Demand Response
Simulation of Wind Energy, Electricity System and Demand
Impacts of Wind Fluctuation on Electricity Systems
Fraunhofer ISI, March 2006

12. Electricity System Simulation
Demand Response for Wind Integration
Electricity System Simulation
Structure of simulation model
Data for conventional power plants
Installed capacity, fuel type, combined heat and power production, availability
Electricity demand (incl. load curves)
Wind generation (based on wind speed data)
Simulation of power plant operation
Determined by: variable costs, minimum operation time
Results of simulation
Fuel use, electricity production, CO2-emissions
Basis for analysis of balancing strategies
Fraunhofer ISI, March 2006

13. Simulation of power plant operation
Demand Response for Wind Integration
Simulation of power plant operation
Wind generation
Electricity demand
shift potential
Power plant database
Prognosis
Deviation
Input data
Operation of power plants
Balancing Capacity
Balancing Energy
Simulation
Fuel use,
electricity production,
emissions, costs
Results
Fraunhofer ISI, March 2006

14. Simulation of wind generation
Demand Response for Wind Integration
Simulation of wind generation
Input data
DWD-Data (3 years) for 180 locations
Wind speed
Pressure und Temperature
Time interval 10 Minutes
10 Turbine types and power curves
Spatial distribution
=> High resolution time series of wind generation
Fraunhofer ISI, March 2006

15. Bottom up model for simulation of the load curve
Demand Response for Wind Integration
Bottom up model for simulation of the load curve
Output
Simulation of yearly load curves of 60 sectors in hourly time resolution and total load curve for Germany
Data basis
UCTE (12 month, 3 typical days, Base year 2000)
VIK/VDEW Data
ISI-Load profiles (typical days)
Method
Generation of load curves for 6 typical days
Algorithm for generation of yearly load curves in hourly time resolution (basis are 6 typical days)
Fraunhofer ISI, March 2006

16. Demand Response for Wind Integration
Outline
Motivation for Demand Response
Potentials for Demand Response
Simulation of Wind Energy, Electricity System and Demand
Impacts of Wind Fluctuation on Electricity Systems
Fraunhofer ISI, March 2006

17. Influence of wind power on power plant operation
Demand Response for Wind Integration
Influence of wind power on power plant operation
Year 2020
Without wind
generation
Fraunhofer ISI, March 2006

18. Influence of wind power on power plant operation
Demand Response for Wind Integration
Influence of wind power on power plant operation
Year 2020
With 39 GW
wind generation
Fraunhofer ISI, March 2006

19. Influence of wind power on power plant operation
Demand Response for Wind Integration
Influence of wind power on power plant operation
Wind generation
Year 2020
With 39 GW
wind generation
Fraunhofer ISI, March 2006

20. Additional balancing power
Demand Response for Wind Integration
Additional balancing power
Fraunhofer ISI, March 2006

21. Additional balancing energy
Demand Response for Wind Integration
Additional balancing energy
Fraunhofer ISI, March 2006

22. Additional balancing costs
Demand Response for Wind Integration
Additional balancing costs
Calculation of balancing costs
Costs approach: opportunity and part load costs Range: 30 – 400 €/MW per day
Price approach: balancing market prices Range: 100 – 2000 €/MW per day
Demand response costs starts at 70 €/MW per day.
Additional balancing power of 6 GW up to 2020 could lead to an increase between 200 – 600 Mio. €.
1 GW demand response can lower this value by 25 %.
Fraunhofer ISI, March 2006

23. Additional balancing costs
Demand Response for Wind Integration
Additional balancing costs
Fraunhofer ISI, March 2006

24. Demand Response for Wind Integration
Conclusion
Increase of balancing power around 0,1 MW per MW wind energy with improved forecast tools.
Balancing energy around 0,1 MWh per MWh wind energy with improved forecast tools.
Technical potential for demand response is high.
Demand response starts to be available at 70 €/MW per day and could lead to significant cost decreases.
Furthermore demand response could compensate local fluctuations and could help to delay or overcome grid extension measures.
Main challenge will be the development of markets and business models to transfer cost reductions to the customers.
Fraunhofer ISI, March 2006

25. Demand Response for Wind Integration
Acknowledgement
Further Information:
Wind integration supported by Demand Response, Final Report
in Cooperation with
Vienna University of Technology, Energy Economics Group
Project carried out in the framework of the program „Energy Systems of Tomorrow" – an initiative of the Austrian Federal Ministry for Traffic, Innovation and Technology (BMVIT).
Marian Klobasa
Fraunhofer ISI, March 2006