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D 4.6.9
Study of pricing process flows and
connection of control processes
Version 1.0
Created:
2017-08-01
By:
Niko Joensuu, Empower IM Oy
Jan Segerstam, Empower IM Oy
Pekka A. Pietilä, Empower IM
Oy
Joni Aalto, Empower IM Oy
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Table of Contents
1.
Preface .......................................................................................................................................................... 3
2.
Introduction .................................................................................................................................................. 4
3.
Creating viable demand response pricing and control flows ....................................................................... 6
4.
Phases of executing retail side demand response ..................................................................................... 11
5.
Pricing and product design ......................................................................................................................... 13
5.1 Fixed priced products ............................................................................................................................... 13
5.2 Dynamically priced products .................................................................................................................... 14
5.3 The effect of different product types on the load control target validation process .............................. 14
5.3.1 Volume and time based products ..................................................................................................... 15
5.3.2 Energy based products ...................................................................................................................... 16
5.3.3 Power based products ....................................................................................................................... 16
5.3.4 The overall target validation process ................................................................................................ 17
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1.
Preface
This report is a part of the results from the third funding period of the Finnish national research project
”Smart Grids and Energy Markets”. The project has been funded by Tekes – the Finnish Funding Agency for
Technology and Innovation. This document is based on the internal workshops and on the work that has
been done so far in the third funding period in a co-operation with SGEM partners.
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2.
Introduction
SGEM Task 4.6.3 defined the demand response process as a conclusion of the second funding period. The
different participants of the process were identified as well as the required information modules and the
information flows between them. In addition, the different pricing components which could be used by an
electricity supplier for product pricing were defined. The demand response process from the supplier’s point
of view is illustrated in the Figure 1.
Figure 1. Demand response process from the electricity supplier’s point of view.
The development of the electricity markets and on-going implementation of hourly consumption metering
will increase the possibilities to utilize demand response. Also, different load control equipment like the
DSOs’ AMR-systems and different kinds of home automation devices will provide the technical infrastructure
to implement load control operations. There are already possibilities to economically profit from the
capability to manage the consumption of a customer portfolio, but these possibilities can become even more
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significant in the near future. The increasing amount of micro production makes the forecasting more
challenging, which affects for example the hedging process related to electricity purchases. Also, as the
market prices become more dependent on the renewable energy production, the market price fluctuation
can become greater. These are the issues, which can make demand response a valuable tool to manage the
risks of electricity trading business.
In this document the focus is on the incentive based demand response which is commonly called also as
contract based demand response. In this kind of operation an electricity market participant utilizes the load
control possibilities of end customers. The end customers are compensated for the participation in demand
response operations. Electricity suppliers are required to design new product structures around demand
response, which support the electricity supplier’s business operations but are also accepted by the end
customers. In this document the connection of pricing process into the overall demand response process is
introduced.
The most significant research questions related to the pricing processes are:

What kinds of products are profitable for the electricity supplier, to whom the products are designed
for and on what terms?
o How the electricity supplier should price the new products?

How the demand response process works?
o What kind of input data the electricity supplier is required to offer for the process?
o What information the process acquires and requires from the different information modules?
o How the most profitable load control group can be determined to fill the demand response
need of the electricity supplier?
o How the load control operations affect the consumption prognosis?

What kind of reporting should be produced based on the demand response process?
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3.
Creating viable demand response pricing and control flows
Before demand response can be offered to customers, an approach must be decided on. The supplier must
choose between traditional approximation and risk premium pricing for these approximations or to create a
dynamic pricing and product structure. The supplier must also choose between ignoring network value or
creating network value with demand response. There are additional issues to be covered, like choice of
production method per time etc. but they are not relevant for the actual realization of demand response.
The electricity system is divided into levels. Each of these needs to achieve balance in order to enable a
market environment and provide quality delivery of supplied electricity. Demand response has a value on all
of these levels. This value is dependent on the state of the network and the nature of both production and
consumption. In other words, the value has to be evaluated separately at each instance.
The electricity market is based on the premise that there exists a balance between supply and consumption
of energy at all times and all points in the network. In this situation the location of production or
consumption is irrelevant and can thus be traded upon between seemingly disconnected partners, ie. a
supplier from Denmark can supply a customer in Finland even without ever actually procuring any “Finnish”
energy. Once this balance is broken, there is no longer a market or the relevant market area decreases in
size. If the balance is intact, production and consumption can be traded as commodities establishing variable
prices dependent on supply and demand.
In pricing demand response the supplier will have to take into account the factors affecting the structures
described above. These structures also need to support the pricing of demand response. This however is
ruled out and will be covered in other research. This research will focus on establishing the factors and
interfaces needed to complete viable demand response pricing. Figure 2 illustrates the structures that are
needed in pricing demand response.
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Figure 2. The structures affecting the pricing of demand response
In traditional pricing the supplier chooses a retail price structure that mimics the dynamic that the supplier
has chosen to expose to the retail market, like the day-ahead market. Consumption is then expected to
follow price signals from this price feed and any aberrations are handled by using a risk premium in pricing.
The challenge in this is that most areas where the response could affect business are left ignored which can
lead to suboptimal results. Let’s consider an example of day-ahead prices being pushed to the customer.
Once delivered, the customer will adjust consumption. Since this is done after the delivery of prices, if the
customer consumes in another way than what was used in offering the consumption into the day-ahead
market, the supplier is opened to the risk of incurring balancing energy charges unless the deviation is caught
in intraday trading. In small volumes this is irrelevant, but in large volumes demand response needs to be in
tune with the supplier’s actions on the different market levels.
The suppliers’ actions on the different market levels can be thought of as bidding wars. This means that any
demand response can be used in establishing the supplier’s position on any part of the market. If the bids go
through, the response must also do that, if not the response must not go ahead. Different markets have
different structures and the network side is essentially bilateral in almost all cases. That said, the universal
information to keep track of is how and on which part of the market is the response potential being used.
This is somewhat similar to the consumption and production forecasts and measured data of the customer
and could be handled in a similar manner.
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Demand response actions affect multiple parties. This means that they need to communicate with each
other. On the longer forecast side the response potential can be calculated into either consumption or
production as the product and market structures on that side typically enable incremental and spread over
time transactions on bid and ask offers. On the shorter side sealed letter auctions prevail, requiring
conditional offers to be handled. This means that the response potential must be specified in bids. Especially
in these cases it is important to interlink offered and accepted response to the actual response execution. In
order to be able to price the demand response the supplier needs to consider all the market levels in which
the supplier is active and determine the potential benefits that could be achieved with additional demand
response.
Derivative market provides products which can be used to secure a certain price level for a certain amount of
electric energy during a pre-defined time period in the future. There are products which cover for example
the next week, but the longer end products enable to settle a price for a pre-defined amount of electric
energy for the following calendar year. Risk strategy which the supplier is following defines the share from
the overall forecasted procurement which will be covered with derivative products. Basically the hedging
level is greater for the coming months and it will decrease when moving forward to the later time periods.
The bases for the hedging are the forecasts of the future consumption and production. These forecasts are
based for example on the weekly or monthly estimates. As previously mentioned the forecast for the
available demand response could be handled similarly. The forecast about the available demand response
would be additional information related to the present situation and would provide additional tool for
designing the hedging levels. Basically this could allow the supplier to do conscious decisions for over or
under hedging which would allow benefiting from it when trading in the following market levels. Under
hedging would be based on the idea that the supplier has more efficient opportunity to affect the overall
consumption and therefore the risk would be reduced from that point of view. On the other hand, over
hedging could provide additional selling opportunities in the following market levels when combined with
the possibility to utilize demand response.
The supplier needs to cover its sales with the procurements from the day-ahead and intraday markets. The
part of the procurement which has been hedged with the products of derivative market will be financially
settled between the trading partners. The day-ahead market provides also an opportunity to utilize demand
response. In this case the demand response would be included in to the day-ahead offer. In this case it must
be noticed that if the offer including the demand response goes through, the supplier has to be able to
implement it.
The basis for the day-ahead trading are the consumption and production forecasts for the coming day and
additionally the forecast about the demand response potential could be offered similarly. The nature of the
demand response operations must be also considered. This is because the demand response cannot be
handled as a reduction of consumption. Once the consumption has been reduced with demand response for
example for a certain hour, the consumption will increase in the following hours therefore potentially
increasing the need for electricity procurement for the coming hours. This dynamic nature of demand
response needs to be considered. The supplier needs also to consider that whether the demand response
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potential has already been included in to the planning of hedging strategies and therefore the actions done
in the later market levels must be in line with the plans that has been previously done.
Intraday market provides an opportunity to make trades during a delivery day, close to the delivery hours.
Intraday market can therefore be described as a tool for balance management. Similarly, demand response
can offer an alternative for intraday trade or it can even provide an additional selling opportunity when
combined with the intraday trading. This means that if the balance of the supplier is positive it could make
and selling offer, which could be implemented with demand response if it goes through. Similarly as with
day-ahead trading, the challenge is that the demand response affects also the consumption of later hours.
This means that once the demand response has been used to be able to sell energy during a certain hour, it
can cause a need to buy energy during the next hours. The issues related to the behavior of the loads are
being researched in SGEM for example in Task 4.2.
It could be beneficial to be able to link the intraday trading offers which are needed when using demand
response, but currently it is not possible. This would allow connecting the utilization of demand response to
the potential need for electricity purchase in the coming hour(s). Additional issue that must be considered in
this market level is the requirement for fast implementation of demand response operations. The time
window between the accepted intraday offer and the time when the demand response needs to be
implemented can be short. This sets requirements for the information systems that are used for
communicating the need for demand response and the load control systems which are used to implement
the actual demand response operations.
When the supplier is planning and developing the price structures for demand response it has to consider the
previously mentioned market levels and the opportunities to link demand response to them. These
considerations form a basis for developing viable pricing of demand response.
Based on the previous text the efficient handling of demand response and linking it to the operation in the
different market levels requires handling of new information. Different kind of information related to the
utilization of demand response would be stored in different information systems which provide certain kind
of information when required. The structure of the required information and the information flows between
different information system modules were also discussed in the research which was done during the second
funding period.
The supplier utilizes risk management system to develop and manage the overall business and risk strategy.
Risk management system includes the information about the hedging level over a time and therefore
information about the actions that have been made by utilizing the products of the derivatives market. In
other words, it contains the information of the price of future energy procurements. The system allows
forecasting the profitability of future trading by enabling to calculate different outcomes based on the
certain number of spot price scenarios. To enable this, risk management system needs also the retail price
information from the CIS(customer information system).
Once the hourly metering is enabled the EDM(energy data management system) systems can provide
bottom-up(meter point based) consumption forecasts, which are more accurate than the consumption
models which are currently used. In the future, EDM systems can also provide similar forecasts about the
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available DR potential. One functionality could be to enable the risk management system to enquire
consumption forecasts based on the different DR scenarios. The goal would be to find the optimal way to
utilize available demand response potential.
EMS(energy management system) is used to provide portfolio based consumption forecasts. This information
forms a basis for the operations in day-ahead and intra-day markets. For example the active balance
management can be made with EMS. Once the need for corrective trading or demand response occurs, the
corresponding operations are implemented.
The system which is utilized to handle DR operations must be capable of handling the number of utilized DR
operations or volume. The maximum amount of allowed DR operations or maximum volume for the DR
operations would be based on the contract between the supplier and the customer. Therefore, the CIS
(customer information system) would handle this information and provide it to the other systems.
Finally, after the delivery hour, EDM system provides the measurement data which will be used for the
billing. Additionally the measurement data can be utilized to estimate the effect of DR by comparing the
realized consumption values to the different forecasts made before the delivery hours and planned DR
actions. Once this data is collected over longer time periods it enables to learn from the implemented DR
actions and further develop the optimal ways to connect the DR to the operations in different market levels.
Once the learning process proceeds it also enables the more efficient planning of DR pricing.
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4.
Phases of executing retail side demand response
The most significant phases of executing demand response on the retail side can be divided into eight parts.
These are the phases which are required to be able to efficiently utilize the demand response possibilities in
a controlled way. Each phase can be also regarded as an independent process. The different phases of the
demand response utilization are illustrated in the Figure 3. In this chapter the different phases are
introduced in order to be able to form a coherent picture about the whole demand response utilization
process. In the chapter 5 the pricing and product design is discussed more closely.
Figure 3. The phases of executing retail side demand response.
Previous chapter discussed the different possibilities for the electricity supplier to utilize demand response in
the market operations in different market levels. The first phase of executing retail side demand response is
to plan and decide on how the available demand response potential could be linked in the overall business
operations. This means the evaluation of the opportunities in different market levels, like introduced in the
previous chapter.
The electricity supplier needs to design and build new product types which would enable the demand
response utilization and would allow utilizing the demand response operations in a way that is desired. The
correct pricing of these products is also essential. From the electricity supplier’s point of view the pricing
must be done in a way which corresponds to the cost structure of the load control operations. In addition, a
careful market research is required to be able to identify the product and price structures which would be
accepted by the end customers. Only this way the end customers could be willing to participate in the
demand response operations. Once the products are designed and pricing is done, efficient marketing is
required to introduce the new products to the market.
Contractual agreement is required between the electricity supplier and the end customer who is willing to
participate in the demand response operations. During this process it is agreed which of the customer loads
can be utilized and what kind of product is suitable for the customer, which practically also defines that how
the end customer is compensated for the load control possibility.
Once the electricity supplier has defined how the demand response can be linked in the business operations
and the volume of demand response potential has achieved a certain level with the contractual agreements
with the end-customers the actual trading operations can begin. In other words the demand response
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operation will be used on different market levels based on the strategy which was previously defined to give
the best overall support for the business operation.
The actual load control actions are needed to be performed according to the need for demand response,
which occurs when operating in the different market levels. The desired demand response action can occur
based on the plans that has been done when designing e.g. the hedging levels, or it can be formed when
operating closer to the delivery hour for example in day-ahead and intraday markets. The implementation of
load control operations is done by sending load control signals and/or requests to the systems which
ultimately perform the load control operations. As previously mentioned, the DSOs’ metering devices are
one possible alternative, but also the home automation devices in the customer premises could be utilized.
After the actual load control operations the electricity supplier invoices the end customer based on the
measurement data from the DSO. Additional measurement data could also be possible to be acquired from
the home automation devices. The invoice is based on the new product type which has been agreed between
the electricity supplier and the end customer.
Finally, the electricity supplier monitors the profitability of the demand response process. This would mean
that the electricity supplier would monitor the level of completed load control signals and requests and also
that how well the actual effect of the demand response operations corresponds to the effect which was
desired. This provides valuable information to further develop the products and also to predict the effects of
different kinds of demand response operations more accurately in the future.
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5.
Pricing and product design
As illustrated in the chapter 4, the process of pricing and product design is the second phase in the whole
retail side demand response execution process and forms a basis for the other phases. There is a great
diversity in the customer portfolio of an electricity supplier so the development of reasonable amount of
new products which are also accepted by the end customers is a challenging task. This chapter introduces the
main alternatives for the pricing of the demand response products and how the different alternatives affect
the demand response execution process.
5.1 Fixed priced products
In fixed priced products the compensation for the demand response operations is included into the price of
the product. In practice, there are two main options for implementing this kind of compensation. The
compensation can be included into the basic fee of the electricity contract and in this case the compensation
would be a fixed amount of money during a certain time period e.g. year. On the other hand, the
compensation can also be included into the energy price. In this case the compensation would be a fixed
share of the energy price and the annual amount of compensation would be depended on the customer’s
annual energy consumption.
These kinds of products are relatively easy to understand for the customers. The compensation is always a
fixed amount of money or a fixed share from the energy price, which allows consumer to predict for example
the annual compensations.
Contrarily, the pricing of fixed price based products is a challenging task for the electricity supplier. When
considering these kinds of products, the possibility for load control has a cost for the electricity supplier
regardless of whether the actual load control operations are implemented or not. This means that the
electricity supplier should be enabled to utilize the demand response operations at least as much as which
covers the fixed costs of the demand response operations.
If the demand response products are based on the fixed pricing the actual utilization of load control
operations does not have any additional costs. In addition, the only limitation for the utilization of demand
response comes from the contract between the electricity supplier and the end customer as there could be a
limit for maximum amount of load control operations during a certain time period. To sum up, demand
response should be utilized as much as possible, even when the expected profit for a single load control
operation is moderate. This is still always a more preferable option than choosing not to utilize the load
control at all.
As previously mentioned, the pricing of fixed priced products is a challenging task. The future profits from the
demand response operations can never be accurately forecasted as the amount of potential profits depend
for example from the overall market situation and the market prices. Therefore the electricity supplier
should have a system which would allow to monitor the costs of the demand response operations and on the
other hand the achieved profits. This information would provide a tool for adjusting the pricing of the
products and the continuous development of the products.
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5.2 Dynamically priced products
Dynamically priced demand response products are based on the idea that the compensation for the end
customer is depending on the amount of realized load control operations. Therefore, the structure differs
significantly from the fixed priced products. Now the compensation for the demand response possibility is
not continuous but is realized only when the load control operations have been performed.
There are some potential pricing structures for these kinds of products. The most straightforward way would
be to compensate the customers based on the number of realized load control operations during a certain
time period. In this case the supplier would need to be able to estimate the value of a single load control
operation. Another alternative would be to compensate the consumer based on the duration of the load
control operation. This would be the time of how long the consumer’s loads would have been affected by the
load control signals. Finally, the compensations could also be based on the amount of energy which has been
affected by the load control signals. This type of product requires that the amount of energy would be
possible to estimate reliably. On the other hand, the pricing could also be based on the peak demand power
of the equipment which is utilized in the load control.
The most important issue from the electricity supplier’s point of view would be that the profit from the
demand response operations would cover the costs of implementing the operations. Due to this, the
electricity supplier should be able to forecast the profits of the utilization of a demand response operation on
a certain time, but also the overall cost of this operation. Without this information it would not be possible to
make the decision to implement a load control operation. Still, with dynamically priced products the
electricity supplier would not have to pay any compensation for the customers in a case if there would be
even relatively longer periods without a need to utilize the load control possibilities.
5.3 The effect of different product types on the load control target validation
process
The electricity supplier’s customer portfolio includes different types of consumers with different kinds of
loads and also personal preferences. Due to this, there must be different kind of electricity products which
suite different kind of customers. Similarly, it is likely that also the agreements between the customers and
electricity supplier regarding demand response will be based on different types of products. Therefore, the
pricing of the products ultimately affects the load control target validation process, which defines the
customers/customer groups which should be included to the certain load control operation to reach the
most profitable outcome.
The most profitable product type for the electricity supplier varies significantly between different market
situations. This chapter aims to provide the basic alternatives and pricing structures for the products.
Ultimately, different products can suit for different electricity suppliers depending on the nature of the
operations in the different markets and the plans of how to include the demand response in to the
operation.
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5.3.1 Volume and time based products
The pricing of these kinds of products is based on the number of load control operations (x €/pc) or on the
duration of a load control operation (x €/h). The timely information about the need for demand response
forms a basis for the load control target validation process. An important issue regarding this is also that on
what form the electricity supplier is capable of determining the need for demand response. One potential
alternative could be an hourly based plan for the coming day.
Once the need for the demand response is defined the electricity supplier would need the information that
whether the required amount of load control operations is possible to be implemented. Alternatively, the
supplier could have the information about the demand response potential before the actual need for the
demand response is defined.
It is important that the electricity supplier would receive the information that is the need for demand
response possible to be fulfilled. Still, it would also be required to be capable of defining that which load
control targets should be utilized from the overall portfolio to fulfill the need for demand response in a most
cost-efficient way. An indicator for this would be kWh/€, which indicates that how much demand response is
possible to implement with one euro. The example on the below demonstrates this validation process. In
this example case, the second alternative would be the most profitable option.
Example: three target groups, which have same annual electricity demand (available load 100 kW/h):

If the compensation for demand response is 1 €/pc, agreed maximum duration for demand response
operation is 1 h and the overall demand response capacity during the hour is 100 kWh100 kWh/€

If the compensation for demand response is 2 €/pc, agreed maximum duration for demand response
operation is 3 h and the overall demand response capacity during the 3 hours is 300 kW150 kWh/€

If the compensation for demand response is 2 €/h, agreed maximum duration for demand response
operation is 2 h and the overall demand response capacity during the 2 hours is 200 kWh50 kWh/€
In addition to this, it must be noticed that the agreed maximum amount for the number of demand response
operations or the agreed maximum duration of demand response operations affect the load control target
validation process. Therefore, the system which is used for this must have the information about the realized
demand response operations which are also allocated to the participated customers.
Due to this, there could potentially be situations when the demand response need could be fulfilled with a
certain load control group, but some of the targets cannot be included to the load control operations as the
maximum amount or duration for the demand response operations has already been used during the time
period under consideration.
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5.3.2 Energy based products
These kinds of products are based on the idea, that the consumers are compensated based on the share of
the total energy price (x c/kWh). Similarly as with the volume or time based products, the need for demand
response should be fulfilled in a most profitable way. Again, the indicator for this would be kWh/€.
When considering the energy based demand response products, the most important issue concerns the
agreed theoretical level of compensation from the overall electricity price. The compensation level (€/kWh)
differs between different products. In order to be able to define the most profitable target group for a load
control operation, the system must include the information about the agreed compensation (€/kWh) as a
monetary separate value. The information about the electricity price which already includes the
compensation is not enough for this operation. This issue can be demonstrated with an example.
Example:

Electricity product which has the electricity price of 5 c/kWh and the agreed compensation level of 0.1 c/kWh. Now the final price for the product would be 4.9 c/kWh.

Electricity product which has the electricity price of 5.1 c/kWh and the agreed compensation level of
– 0.2 c/kWh. Now the final price for the product would also be 4.9 c/kWh.
In this example case, the final price for the demand response product would be the same. So by only utilizing
this information it would not be possible to determine which one of the load control targets should be
primarily utilized in demand response operations. The separate information about the agreed amount of
compensation is required. This would enable to first utilize the load control targets which have the lower
level compensations.
5.3.3 Power based products
Currently power based products are commonly used with the electricity distribution products among the
large electricity consumers. The power based component of the product is calculated for example based on
the two highest hourly power values during the preceding 12 months. The pricing unit for the power based
component is €/kW,month. The desired effect of these kinds of products is to direct the consumer to avoid
electricity consumption during the time when the maximum power demand usually occurs.
There are many options on how also the electric energy products could be designed with a more power
based structure, by adding a power demand based pricing component. All of these new product types would
require that the electricity supplier is able to define a power based component for the products. If the power
based component would be used, the price of energy based pricing component should decrease in order to
maintain the supplier’s competiveness on the market.
One option would be to emphasize a single hour of a month with a high power demand. The cost from the
power based component would therefore be based on the highest hourly power demand and the price for
the power component. In this case the customer would be disposed to the risk which would occur if there
would be normally stable power demand but a possibility to single power demand peaks. Alternatively the
power price could be defined separately for every hour. Now the consumer would not be penalized based on
a single peak power hour.
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Finally, a power limit could be defined for the consumer. Now the pricing would be based on the certain
price level if the power demand remains under the pre-defined power limit. When the power limit is
exceeded the price of electric energy would be higher or there would be a sanction based on the volume
and/or duration of the crossage.
The most significant benefits which could occur if the power based products would be widely utilized would
be the smaller profile costs for the supplier and avoidance of conflict of interest between the electricity
supplier and the DSO. Currently electricity suppliers need to carefully consider the cost effects which are
caused due to challenges to forecast the varying consumption. Power based electricity products could reduce
the variation in the overall consumption and therefore lower the profile costs for the electricity supplier.
Also, if the products of electricity suppliers and DSOs would be based on the similar structure, the incentives
to steer the consumer’s consumption would be based on the same principles.
5.3.4 The overall target validation process
It is possible that the overall demand response customer portfolio of an electricity supplier will include all
types of previously mentioned products including dynamically priced products and fixed priced products.
Therefore, the overall load control target validation process determines the required load control targets
from the whole portfolio of the customers which have different types of demand response contracts.
Starting point for the process is to define a customer group for the demand response operation which fulfills
the need for demand response in a most cost efficient way. Briefly, the process would start by first utilizing
the loads which are behind fixed priced products. If the demand response need cannot be fulfilled by using
these loads, the additional demand response capacity would be further determined from the loads which are
behind dynamically priced products, starting from the loads which have the lowest compensations.
Additional issue is the way of how the load control operations are implemented. It is possible that the
electricity supplier would utilize both, direct load controls and load control requests. Therefore, the
electricity supplier should decide that should for example the direct load control be the primarily method for
load controls even if the theoretical costs for the load controls would be the same. Direct load controls are
potentially a more reliable way to implement load control operations. This is because it would be uncertain
that how often the customers follow the load control requests. The electricity supplier would most likely be
required to estimate a risk marginal for the targets which are based on the demand response request, which
would cover the cases when the customers are not following the requests.
It must be noticed that the demand response operation is profitable for the electricity supplier only if the
achieved profits cover the costs for implementing the load control operations. With the fixed priced
products, there is a great risk that the fixed costs for the load control grow too high, especially if the
possibility to utilize the load control occurs for example once a year etc. It must also be noticed, that the
compensations for the load control are not the only possible costs. There can also be additional system
and/or equipment costs. When considering the load control possibilities which are dynamically priced, the
important factor is to be able to define the marginal value for the potential profit of the load control
operation which needs to be achieved in order to implement economically profitable load control
operations.
CLEEN OY
Eteläranta 10, P.O. BOX 10, FI-00131 HELSINKI, FINLAND www.cleen.fi
D 4.6.9
18 (18)
14.11.2012
Ultimately, the occurrence of the possibilities to utilize demand response is depending for example on the
market price fluctuation and on how the electricity supplier operates in different markets. The demand
response possibilities should support the overall business operations as efficiently as possible.
CLEEN OY
Eteläranta 10, P.O. BOX 10, FI-00131 HELSINKI, FINLAND www.cleen.fi