Effects of demand response products in the interface of electricity supplier and customer
Permanent address of the item is
Kysyntäjoustotuotteiden vaikutukset sähkön myyjän ja asiakkaan rajapinnassa
The increasing amount of intermittent renewable energy production sets new challenges for the power system and electricity market. In price-based demand response (DR) the electricity consumption is shifted from the more expensive spot hours to the cheaper hours when there is more production. If the supplier can influence the customers’ consumption the flexibility could benefit the whole electricity market and the use of production capacity can be optimized. Under research of this study was what kind of electricity contracts are needed to commit households to DR and how those contracts would affect the interface of supplier and the customer. Central questions were how the customer would time his consumption as the supplier wishes or how supplier’s load control could be compensated to the customer if the supplier can control e.g. customer’s heating. Electricity market information exchange and legislation were examined to enable new DR contract processes. Representatives of electricity supply companies were interviewed to find out their opinions and expectations about DR. The field of energy business is widely regulated which sets certain limits for the electricity sale and new kind of electricity contracts. As a result of this study was found out that updating these terms and decrees can also promote DR because no party will invest on needed infrastructure without incentives or obligations. As a result of the interviews was found out that suppliers are interested in DR if volatility of electricity price increases making it profitable. Also after that the interviewees wished for as ready service as possible to adopt DR and which is easy to implement for different customers. It can be concluded that suppliers’ and distribution system operators’ information systems and electricity market information exchange need new functionalities, e.g. to load management. Possible load control has to be implemented keeping the supplier switching process easy. Suitable customers need to find the DR products so that DR would benefit the supplier. The new basis for electricity pricing has to be introduced to the customers. At first, dynamically priced electricity contract is the easiest way to implement DR so the product should be priced to benefit both the supplier and the customer. Marketing of the product can be proceed by increasing consumers’ awareness of electricity price formation and offering alternative incentives. The image of future’s electricity supplier could become diverse energy service provider.