Incentive-based Demand Response: A rebate-based Design

Abstract

In future power grids, the high penetration with Renewable Energy Resources (RES) will be a big challenge. The problem is not the high RES contribution per se, but even desirable in order to make a decisive contribution to climate protection through CO2-neutral power generation. The problem lies in particular in the fact that power stations based on fossil fuels in current electricity networks are stabilizing factors and sources of operational flexibility. In future electricity grids, new sources of flexibility must be tapped - not only at the generation but also on the side of demand, e.g. through Demand Side Management (DSM). Various approaches are divided into direct and indirect control methods. In this paper, we present a model class of Incentive-based Demand Response (IbDR), where the power consumption of household coalitions is indirectly controlled by rebates on electricity bills. We apply the theory of (convex) cooperative games to design IbDR events that promote cooperative behavior of households. In particular, the methods are designed so that the use of storage (batteries) are very beneficially integrated. We have developed a simulation tool MASim that simulates electricity consumptions of households. Using MASim we carried out numerical experiments, which show the functionality of our proposed IbDR method. In field studies, we developed the ICT and tried out how batteries can be controlled within the scope of our proposed IbDR schemes.