The Impact of Long-Term Demand Response on Investment Planning of Renewable Power Systems

The increased penetration of intermittent renewable energy sources has an important impact on the operation and planning of power systems. On the one hand the short-term variability and limited predictability challenges system security, resulting in an increased need for operational flexibility. On the other hand the limited number of full load hours challenges system adequacy, resulting in an increased need for back-up generation capacity. In highly renewable power systems this backup generation capacity can come from e.g. biomass technologies or power-to-gas storage. An alternative is the use of the flexibility provided by long-term demand response. Such demand response can shift demand over longer periods of time, and as such is able to structurally reduce demand during moments of low energy availability. This work quantifies the impact of such demand response on the investment planning of a conceptual power system following the integration of large shares of renewable generation. Simulations show that a limited amount of long-term demand response flexibility can have an important impact on the total system cost and the investments in generation and storage capacity. They also show the importance of the way in which the use of this flexibility is constrained in terms of the number of activations, the maximum activated power and the maximum duration of an activation.