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Demand Response of Medium-sized Consumption Points

VAMK´s Fesio researcher Mr Timo Rinne has written an article " Demand response of medium-sized consumption points”. The whole article can be read from VAMK`s  Energiaa magazine here:  and below is a summary of it.

To ensure the reliability of the electricity grid, production and consumption must be balanced. Fossil fuel energy production is being replaced by weather-dependent renewable energy sources such as wind and solar power, making it challenging to adjust production to match consumption. This necessitates energy storage and demand response, which involves adjusting consumption according to electricity prices and availability.

Electricity prices fluctuate hourly depending on the balance between production and consumption, and demand response helps smooth out these price variations. Demand response can be divided into voluntary consumption based on market prices and centrally controlled reduction of consumption. Centrally controlled demand response functions like a virtual power plant, capable of increasing or decreasing load on the grid as needed.

In voluntary demand response, consumers shift consumption from expensive to cheaper hours. In contrast, centralized demand response is managed by an electricity utility or third party to balance the grid as required. This is particularly crucial for large and medium-sized consumers who can significantly impact grid stability.

With increasing wind power production, electricity prices have begun to fluctuate based on production variability. In the future, demand response will be even more critical for ensuring grid stability and economic operations. In addition to energy storage, demand response is needed to balance fluctuations in production and consumption.

Demand response benefits both individual consumers and the entire electricity grid by improving its reliability and cost-effectiveness. Shifting consumption to cheaper hours helps maintain grid balance, and large consumers can directly participate in balancing electricity markets through centrally managed flexibility products.

In Finland, the importance of demand response is particularly emphasized during the winter season when electricity consumption is at its peak. Variations in weather-dependent energy production can cause significant price fluctuations, and demand response provides a means to mitigate these variations. By 2050, demand response's role is expected to grow further as the share of renewable energy in electricity production increases significantly.

In summary, demand response is an essential component of future electricity grids where renewable energy forms an increasingly large part of production. It enhances grid stability, smooths out electricity price fluctuations, and offers consumers opportunities to save on electricity costs. Through both centralized and voluntary demand response measures, significant benefits can be achieved for electricity markets and consumers alike.

This  review and translation was written by principal lecturer Lotta Saarikoski, VAMK´s Fesio project worker.

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