Stochastic Model for Profitability Evaluation of Demand Response by Electric Thermal Storage

Abstract

In this paper, a tool for the economic assessment of a potential demand response asset used for power system balancing is presented. The model tackles uncertainties in electricity market prices and system imbalance by employing Monte Carlo simulations. While the model provides vast customizability options, the potential demand response benefits for a particular type of consumer, smart electric thermal storage, are the focus of the case study. It is found that such type of operations can be economically feasible for the asset owner, but on the condition that sufficient proportion of the balancing renumeration is shared with the owner by the aggregator.