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For Better or for Worse? On the Economic and Ecologic Value of Industrial Demand Side Management in Constrained Electricity Grids

Title data

Rövekamp, Patrick ; Schöpf, Michael ; Wagon, Felix ; Weibelzahl, Martin:
For Better or for Worse? On the Economic and Ecologic Value of Industrial Demand Side Management in Constrained Electricity Grids.
In: Energy Policy. Vol. 183 (2023) . - 113781.
ISSN 0301-4215

Project information

Project title:
Project's official title
Project's id
Projektgruppe WI Nachhaltiges Energiemanagement & Mobilität
No information

Abstract in another language

Electricity systems are in dire need to scale up volatile decentralized renewable electricity supply (RES), reducing the dependency on fossil fuels and drastically cutting carbon emissions. Industrial demand side management (DSM) is a key enabler of the energy transition, as it allows to align large shares of electricity consumption with (renewable) supply. We present a short-term market model to evaluate the economic value (i.e., reduced system costs) and ecologic value (i.e., reduced carbon emissions) of industrial DSM within a constrained electricity grid, incorporating conventional electricity supply (flexibility) and RES. A model evaluation yields four key findings:
(1) Grid-capacity constraints determine whether and to what extent industrial DSM may contribute economic and ecologic value. (2) Both the economic and ecologic value of industrial DSM are determined by the location within a capacity-constrained electricity grid. (3) DSM might even increase carbon emissions depending on local merit-orders. (4) Carbon emission pricing may resolve a potential conflict between ecologic and economic DSMvalue maximization. Based on these findings, energy policy should (i) establish an electricity market design that provides sufficient local price signals for industrial DSM and (ii) ensure that local merit-orders incentivize industrial DSM to contribute both economic and ecologic value based on appropriate carbon prices.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Industrial demand side management; Congestion management; Renewable energies; Nodal pricing; Carbon emissions
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Profile Fields > Emerging Fields > Energy Research and Energy Technology
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Branch Business and Information Systems Engineering of Fraunhofer FIT
Research Institutions > Affiliated Institutes > FIM Research Center for Information Management
Result of work at the UBT: No
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 04 Oct 2023 06:36
Last Modified: 04 Oct 2023 06:36