Computational Management Science pp 9-15
Load Shifting, Interrupting or Both? Customer Portfolio Composition in Demand Side Management
The share of renewable power sources in the electricity generation mix has seen enormous growth in recent years. Generation from fluctuating renewable energy sources (Wind, Solar) has to be considered stochastic and not (fully) controllable. To align demand with volatile supply, balancing and storage capacities have to be increased. To avoid high costs of storage investments, we suggest exploiting demand side flexibility instead. This can be operationalized through scheduling of electrical loads. Prior research typically assumes that both the set of customers, as well as the flexibility endowments of the scheduling problem, are exogenously given. However, the quality of the scheduling result highly depends on the composition of the customer portfolio. Therefore, it should be designed in an optimal fashion. This includes two decisions: which customers should be part of the portfolio and how much flexibility each customer should offer. Thus, future energy retailers face a complicated decision-making problem.We present a portfolio design optimization model which includes both selecting customers to be part of the portfolio and scheduling their flexibility. Furthermore, we present exemplary results from a scenario based on empirical load and generation data.
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