Market potential for using demand response from heat pumps in multi-family buildings

Abstract: More renewable energy leads to higher energy imbalances in the Swedish electric power system. In the same time, the grid capacity is almost reached in some regions which requires an extension of the current grids or a reduction of the power consumption. Demand response could be a key factor for both stabilizing the energy balances and reducing the grid congestion. The aim with this thesis is to analyze the potential incomes that demand response from heat pumps can generate for the balance responsibility parties and the grid operators and evaluate how it would affect the end-consumers.   The investigated local grid that contains of 174 multi-family buildings with heat pumps could reduce its highest peak power with 2,9 MW. This peak power reduction generated a cost reduction of 483 000 SEK per year or 2800 SEK per building per year in reduced penalty fees and power subscription fees. The mFRR market and the power reserve market were determined to be the most suitable markets for using demand response from heat pumps on for the balance responsibility party in the electricity price region SE3. SE3 consists of 10146 multi-family buildings with heat pumps. The mFRR market generated an average income of 2 699 000 SEK per winter season whereas the power reserve market generated a yearly administrative compensation of 1 133 000 SEK per season and 104 000 SEK per call-off. It is important that end-consumers obtain demand-based tariffs or hourly based tariffs to enable a cost reduction from the control system.