A Critical Review of Demand Response Products as Resource for Ancillary Services: International Experience and Policy Recommendations

David Ribó-Pérez, Luis Larrosa-López, David Pecondón-Tricas and Manuel Alcázar-Ortega
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David Ribó-Pérez: Institute for Energy Engineering, Universitat Politècnica de València Camí de Vera S/N, 46022 Valencia, Spain
Luis Larrosa-López: Institute for Energy Engineering, Universitat Politècnica de València Camí de Vera S/N, 46022 Valencia, Spain
David Pecondón-Tricas: Institute for Energy Engineering, Universitat Politècnica de València Camí de Vera S/N, 46022 Valencia, Spain
Manuel Alcázar-Ortega: Institute for Energy Engineering, Universitat Politècnica de València Camí de Vera S/N, 46022 Valencia, Spain

Energies, 2021, vol. 14, issue 4, 1-25

Abstract: Demand response is a key element of future power systems due to its capacity to defer grid investments, improve demand participation in the market, and absorb renewable energy source variations. In this regard, demand response can play an important role in delivering ancillary services to power systems. The lack of standardization and ancillary services programs prepared for traditional generators have blocked the participation of demand in these services. Nowadays, increasing needs to ensure the security of supply, renewable fluctuations, and information and communication technology advances are boosting the interest in demand response products to deliver ancillary services. While countries have had lengthy experience with these programs, others are starting from almost zero to develop these programs. To our knowledge, no analysis or standardized comparison exists of the different parameters and prices of demand response in ancillary services among different countries. Our study reviews more than 20 power systems around the world and their programs to classify them according to standard demand response parameters. At the end of the paper we discuss the main characteristics and prices that face demand response in ancillary services markets and a series of policy recommendations to policymakers to improve the deployment on demand participation in ancillary services.

Keywords: demand response; ancillary services; ENTSO-E; FERC; standardization; restoration reserves; operation reserves (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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