Value and granularity of ICT and smart meter data in demand response systems

Stefan Feuerriegel, Philipp Bodenbenner and Dirk Neumann

Energy Economics, 2016, vol. 54, issue C, 1-10

Abstract: The large-scale integration of intermittent resources of power generation leads to unprecedented fluctuations on the supply side. An electricity retailer can tackle these challenges by pursuing strategies of flexible load shifting — so-called demand response mechanisms. This work addresses the associated trade-off between ICT deployment and economic benefits. The ICT design of a demand response system serves as the basis of a cost-value model, which incorporates all relevant cost components and compares them to the expected savings of an electricity retailer. Our analysis is based on a typical German electricity retailer to determine the optimal read-out frequency of smart meters. For our set of parameters, a positive information value of smart meter read-outs is achieved within an interval of 21 to 57min regarding variable costs. Electricity retailers can achieve a profitable setting by restricting smart meter roll-out to large customers.

Keywords: Demand response; Load shifting; Smart meters; Electricity markets; Information granularity; Business models (search for similar items in EconPapers)
JEL-codes: C44 C53 D80 L94 Q01 Q41 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:54:y:2016:i:c:p:1-10

DOI: 10.1016/j.eneco.2015.11.016

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