/ Publications / A bilevel model for voluntary demand-side flexibility in distribution grids
Working Paper
A bilevel model for voluntary demand-side flexibility in distribution grids
10 February 2022
Authors: NOUICER, Athir; MEEUS, Leonardo; DELARUE, Erik
This paper explores the price setting of demand-side flexibility, modelled as consumers’ voluntary load reduction, in distribution grids. It develops a long-term equilibrium optimization model with a bi-level setting for voluntary demand-side flexibility. In the Upper Level (UL), the Distribution System Operator (DSO) maximizes welfare by deciding the level of network investments and setting the price for demand-side flexibility. The DSO also sets the distribution network tariff in order to recover the network investment and flexibility costs from the Lower Level (LL) consumers. LL’s active residential and commercial consumers react to network tariffs and to the price offered for their flexibility by investing in rooftop solar and batteries and offering a certain volume of demand-side flexibility when requested by the DSO. The passive residential consumers also provide flexibility by decreasing their load, but they do not invest in rooftop solar or batteries. We find that voluntary demand-side flexibility increases welfare and allows significant network investment savings. We also find that the benefits can reach all types of consumers. Besides, it is opportune to apply price differentiation when setting the price for demand-side flexibility, where applicable.
Electricity network companies can innovate their own network business or stimulate system innovation, including by facilitating market activities and the integration of renewable energy sources. Regulation is essential to turn [...]
To enable deep electrification of the economy, a significant expansion of grid distribution capacity will be required. However, how much grid investments eventually will be needed depends on how the [...]
This edited book is intended to be a companion volume to our Handbook on Electricity Markets (Glachant, Joskow, and Pollitt, 2021). That book focused on wholesale electricity markets, looking at [...]
Join our community
To meet, discuss and learn in the channel that suits you best.
We use cookies to help personalise content and provide a better experience. By clicking Accept all, you agree to this, as outlined in our Cookie Policy. To change preferences or withdraw consent, please update your Cookie Preferences.