IEEE Power & Energy Magazine - January/February 2021 - 60

8

8
7

OPEX
D CAPEX
I CAPEX
T CAPEX
G CAPEX (Low-C)
G CAPEX (Conv.)
Total

6
5
4

3.8

3
2
1
0
-1

100 g/kWh

50 g/kWh

figure 6. The gross system savings of decentralized flexibility in the Great Britain system under different carbon
emissions targets. (Positive/negative values indicate that the
respective type of expenses is reduced/increased due to the
effects of decentralized flexibility.) D: distribution; I: interconnection; G: generation; T: transmission; OPEX: operating expenditures; CAPEX: capital expenditures; Low-C: low-carbon;
conv.: conventional.
60	

ieee power & energy magazine	

Renewable
Generation Curtailment (%)

9

integration. Figure 7(b) quantifies the energy bill savings
that flexible consumers enjoy with respect to inflexible consumers for the same amount of energy consumed, assuming
that these bills are based on fully cost-reflective tariffs capturing the system operation conditions. It can be observed
that these savings are very high (especially in the 2030 system, where they even reach a level of around 44%), implying that under a cost-reflective energy pricing framework, as
we move toward a lower-carbon system, the implications of
the temporal patterns of consumers' demand on their bills
become more important than their overall energy consumption. It is also noticed that the savings achieved by flexible
consumers are reduced as the percentage of these consumers increases, implying that early adopters of flexibility will
enjoy the highest benefits.
Second, the majority of European balancing and capacity
markets impose excessively strict limits on the type, minimum size, and minimum temporal availability of the participants. In combination with the lack of regulatory clarity
around the role of aggregators in many European countries,
the value of distributed flexibility in reducing the system
balancing and capacity costs remains largely unexploited.
Notable examples include forbidding demand-side resources
from accessing certain markets or not participating on a

22
20
18
16
14
12
10
8
6
4
2
0

Reduction in Energy Bills (%)

Savings in Annualized
Great Britain System Cost (£Billion/Year)

The current European market design does not capture the
whole spectrum and full extent of the benefits of flexibility
resources, thus hindering their further development. In thve
energy market segment, most small consumers and prosumers are still facing flat retail tariffs that do not reflect the
time-variable value of energy in the system; therefore, they
are prevented from activating their flexibility resources to
consume energy during periods of abundant renewable generation and/or produce energy during periods of low availability of renewables.
Figure 7 presents the results of a study conducted by
Imperial College London, which aimed at quantifying
the impacts of domestic demand flexibility (in terms of
smart-charging EVs, electric heating with heat storage,
and smart wet appliances) on both system operation and
the domestic consumers' energy bills in the Great Britain system. Different scenarios have been examined with
respect to the percentage of consumers owning the flexibility resources (0, 25, 50, 75, and 100%) and the generation mix (including the current mix in 2020 and the
projected mix in 2030). It has been assumed that activation of demand flexibility respects the consumers' service
requirements in terms of traveling (for EVs), the indoor
temperature (for heating), and the timely completion of the
wet appliances' cycles, implying that such demand flexibility does not reduce their overall energy consumption
but merely redistributes it in time.
Figure 7(a) demonstrates that demand flexibility can
greatly reduce the levels of renewable generation curtailment, especially in the 2030 system with higher renewable

50
45
40
40
30
25
20
15
10
5
0

0

25
50
75
Flexible Consumers (%)

100

(a)

25

50
Flexible Consumers (%)
(b)

2020

75

2030

figure 7. (a) The impacts of domestic demand flexibility
on renewable generation curtailment and (b) the relative
reduction of flexible consumers' energy bills with respect
to inflexible consumers in the Great Britain system.
january/february 2021
IEEE Power & Energy Magazine - January/February 2021

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - January/February 2021
