Demand side integration: four potential business cases and an analysis of the 2020 situation

In this study, we explore four different business cases for smart power by means of simulations. The demand and supply are extrapolated to the year 2020 and the influences of photovoltaic installations and demand response are investigated. A district of 300 houses is simulated, where each household consists of three types of intelligent systems: electric devices with a storage capacity like boilers, shiftable loads like washing machines and batteries. Agents, representing devices can trade power on virtual markets, like the Power-Matcher. First, the relation between load flows and smart power is examined. We found, as a rule of thumb, that the variations in load flow decrease proportionally to the fraction controlled power. This might have important consequences for investment policies in power networks. Next, the stability of a cluster is examined. Here it is estimated how long a cluster can remain stable if a constant power flux is imposed. This flexibility can be traded, directly on an imbalance market or through a balance responsible party (BRP). In the next two business cases, the implications for retailers and end-users are examined for three billing types: a fixed tariff, a two-tariff structure, and an hourly "real-time'' tariff structure. Compared to the fixed tariff structure, the incentive to use smart devices is small in the double tariff structure. In a real-time tariff structure incomes increase and risks decrease for retailers, while end-users have the potential to decrease costs. If we succeed to implement 20% demand response by 2020, our power grid remains able to transport the increased power flows. Copyright (C) 2010 John Wiley & Sons, Ltd.