THE PARTICIPATION OF RESIDENTIAL CONSUMERS IN ENERGY MARKETS THROUGH DEMAND RESPONSE
Authors: Kiianchuk Vladyslav , Makhotilo Kostiantyn 
Published: September 2024

Abstract. The article considers the approach to the interaction of the transmission system operator with consumers - the demand management mechanism, as well as its role and place in the energy markets. The tools and experience of implementation of demand management are described. With the help of a natural experiment, the possibility and effectiveness of the participation of consumers with household storage hot water boilers in the balancing market was evaluated. Optimizing the participation of large numbers of consumers in energy markets is a challenging problem, especially for portfolios with thousands or millions of flexible resources. One of the aggregator's tasks is to transform the functionality of automation technologies, such as a consumer's "smart" home, into products that could be traded on energy markets. The task of optimization consists in the effective and timely management of a large number of flexible resources. A key feature of demand management is the sale of managed load on a par with generating capacity. This is explained by the fact that, from the point of view of the balance, in the energy system, one kWh not consumed equals one kWh produced. As a result, the financial benefits of managing consumer electricity demand are equivalent to the prices of balancing services and the provision of capacity reserves from other market participants. The sale of a demand-side management resource can be implemented through balancing market (BM) and ancillary service market (SMS) instruments, which use TSOs to balance the power system. Attracting additional participants in RDP and BR should stimulate competition and allow TSOs to meet their needs for auxiliary and balancing services, which will positively affect the reliability of the energy system and increase competition. In general, the level of provision of the power system with reserves depends on a wide range of factors, including: different hours of the day, weather conditions or trading strategies of market participants, etc. The optimal way to involve household consumers in responding to demand is to use the services of aggregators. But this does not mean the simple accumulation of a certain resulting power of consumers. The quantitative and qualitative composition of the aggregator's portfolio should ensure the execution of OSP commands in full, even in conditions of unavailability of part of the boilers or other aggregated units. For this, it is necessary to have a certain reserve of regulating power, for example, other boilers or energy storage units for the possibility of their prompt replacement (reconfiguration) within the portfolio. Demand management in the power system can effectively reduce the peak load of the system and delay the necessary capital investment in additional generating capacity and transmission lines. In addition, demand management facilitates the integration of renewable energy sources and reduces the costs of setting up, starting or shutting down thermal power units during peak load periods. Consumer participation in demand management requires bidirectional communication infrastructure, advanced metering, efficient economic tariffs and energy management algorithms. With the rise of smart grid technologies and automated demand response systems, demand management systems are a key element expected to provide a cost-effective alternative to traditional generation-side solutions to meet increasing demand for electricity during peak load or high prices. Demand management competes with auxiliary services provided by "traditional" providers - power plants and is used by TSOs to stabilize UES parameters when the power grid faces unforeseen situations, accordingly, the development of this sector is an important component of energy security.