‘Nudging’ energy users: regulatory measures to address the risk of aggregate peak demand in European electricity markets

For decades regulators in the energy sector have focused on facilitating the maximisation of energy supply in order to meet demand through liberalisation and removal of market barriers. The debate on climate change has emphasised a new type of risk in the balance between energy demand and supply: excessively high energy demand brings about significantly negative environmental and economic impacts. This is because if a vast number of users is consuming electricity at the same time, energy suppliers have to activate dirty old power plants with higher greenhouse gas emissions and higher system costs. The creation of a Europe-wide electricity market requires a systematic investigation into the risk of aggregate peak demand. This paper draws on the e-Living Time-Use Survey database to assess the risk of aggregate peak residential electricity demand for European energy markets. Findings highlight in which countries and for what activities the risk of aggregate peak demand is greater. The discussion highlights which approaches energy regulators have started considering to convince users about the risks of consuming too much energy during peak times. These include ‘nudging’ approaches such as the roll-out of smart meters, incentives for shifting the timing of energy consumption, differentiated time-of-use tariffs, regulatory financial incentives and consumption data sharing at the community level.

A review of the costs and benefits of demand response for electricity in the UK

The recent policy discussion in the UK on the economic case for demand response (DR) calls for a reflection on available evidence regarding its costs and benefits. Existing studies tend to consider the size of investments and returns of certain forms of DR in isolation and do not consider economic welfare effects. From review of existing studies, policy documents, and some simple modelling of benefits of DR in providing reserve for unforeseen events, we demonstrate that the economic case for DR in UK electricity markets is positive. Consideration of economic welfare gains is provided.

Privatisation and cross-border electricity trade: from internal market to European Supergrid?

he perspective European Supergrid would consist of an integrated power system network, where electricity demands from one country could be met by generation from another country. This paper makes use of a bi-linear fixed-effects model to analyse the determinants for trading electricity across borders among 34 countries connected by the European Supergrid. The key question that this paper aims to address is the extent to which the privatisation of European electricity markets has brought about higher cross-border trade of electricity. The analysis makes use of distance, price ratios, gate closure times, size of peaks and aggregate demand as standard determinants. Controlling for other standard determinants, it is concluded that privatisation in most cases led to higher power exchange and that the benefits are more significant where privatisation measures have been in place for a longer period.

Demand side response: patterns in Europe and future policy perspectives under capacity mechanisms

Demand Side Response (DSR) has been slow to emerge in European electricity markets. This paper aims to both examine the reasons for low levels of DSR in Europe and reflect on factors that might affect the participation of DSR in capacity mechanisms. It relies on available evidence from the literature, secondary data on existing DSR programmes and energy aggregator's data from industries participating in DSR. Findings show that changes to the duration of contracted loads under existing or new programmes might increase the penetration of DSR. The introduction of capacity mechanisms may increase DSR from demand turn down if longer response times were available.

Increasing thermal plant flexibility in a high renewables power system

Thermal generation is a vital component of mature and reliable electricity markets. As the share of renewable electricity in such markets grows, so too do the challenges associated with its variability. Proposed solutions to these challenges typically focus on alternatives to primary generation, such as energy storage, demand side management, or increased interconnection. Less attention is given to the demands placed on conventional thermal generation or its potential for increased flexibility. However, for the foreseeable future, conventional plants will have to operate alongside new renewables and have an essential role in accommodating increasing supply-side variability. This paper explores the role that conventional generation has to play in managing variability through the sub-system case study of Northern Ireland, identifying the significance of specific plant characteristics for reliable system operation. Particular attention is given to the challenges of wind ramping and the need to avoid excessive wind curtailment. Potential for conflict is identified with the role for conventional plant in addressing these two challenges. Market specific strategies for using the existing fleet of generation to reduce the impact of renewable resource variability are proposed, and wider lessons from the approach taken are identified.

CASCADE: An Agent Based Framework For Modeling The Dynamics Of Smart Electricity Systems

The Complex Adaptive Systems, Cognitive Agents and Distributed Energy (CASCADE) project is developing a framework based on Agent Based Modelling (ABM). The CASCADE Framework can be used both to gain policy and industry relevant insights into the smart grid concept itself and as a platform to design and test distributed ICT solutions for smart grid based business entities. ABM is used to capture the behaviors of diff erent social, economic and technical actors, which may be defi ned at various levels of abstraction. It is applied to understanding their interactions and can be adapted to include learning processes and emergent patterns. CASCADE models ‘prosumer’ agents (i.e., producers and/or consumers of energy) and ‘aggregator’ agents (e.g., traders of energy in both wholesale and retail markets) at various scales, from large generators and Energy Service Companies down to individual people and devices. The CASCADE Framework is formed of three main subdivisions that link models of electricity supply and demand, the electricity market and power fl ow. It can also model the variability of renewable energy generation caused by the weather, which is an important issue for grid balancing and the profi tability of energy suppliers. The development of CASCADE has already yielded some interesting early fi ndings, demonstrating that it is possible for a mediating agent (aggregator) to achieve stable demandfl attening across groups of domestic households fi tted with smart energy control and communication devices, where direct wholesale price signals had previously been found to produce characteristic complex system instability. In another example, it has demonstrated how large changes in supply mix can be caused even by small changes in demand profi le. Ongoing and planned refi nements to the Framework will support investigation of demand response at various scales, the integration of the power sector with transport and heat sectors, novel technology adoption and diffusion work, evolution of new smart grid business models, and complex power grid engineering and market interactions.

Observed atmospheric electricity effect on clouds

The atmosphere's fair weather electric field is a permanent feature, arising from the combination of distant thunderstorms, Earth's conducting surface, a charged ionosphere and cosmic ray ionization. Despite its ubiquity, no fair weather electricity effect on clouds has been hitherto demonstrated. Here we report surface measurements of radiation emitted and scattered by extensive thin continental cloud, which, after ~2 min delay, shows changes closely following the fair weather electric field. For typical fluctuations in the fair weather electric field, changes of about 10% are subsequently induced in the diffuse short-wave radiation. These observations are consistent with enhanced production of large cloud droplets from charging at layer cloud edges.