One step towards a more sustainable energy system is to create a more flexible electrical grid, where increased demand response among electricity consumers can play an important role. A distribution grid owner can encourage their customers to use electricity more evenly distributed during the day by introducing different types of grid fees such as time-differentiated power tariffs. In this master thesis, the theoretical economic impact of a flattened load profile for a distribution grid owner is investigated. Different factors that impact the distribution grid owner’s economy are identified and two are chosen to be quantified; losses in the grid and the fee to the feeding grid. The possibility to save money by avoiding future investments is discussed but not quantified. Models are developed for modifying an existing load profile, calculating the losses associated with a certain grid and load profile, and calculating the value of a lowered subscribed power to the feeding grid. The models are applied on the distribution grid owner Sala-Heby Energi Elnät AB. The results show that with a load profile that is flattened out 100% every day, which is the theoretical best possible scenario, the losses can be reduced with 2.6% which corresponds to a value of 81 000 SEK. By lowering the subscribed power to the feeding grid as much as the highest peak of the year is reduced in the modified load curve, the cost to the feeding grid would be reduced 1.2 million SEK, or 10% of the fee to the feeding grid. In the 20% curve modification case, which would be more realistic to achieve in reality, the losses decreased by 0.9% which corresponds to a value of 29 000 SEK. Furthermore, the fee to feeding grid would be reduced with 0.34 million SEK which corresponds to 2.8% of the total fee. In summary, the theoretical economic saving potential is around 10 times higher for the fee to feeding grid than for grid losses. / Marknadsbaserade styrmedel i bostadssektorn

The increasing amount of renewable energy in the power system have led to new challenges to balance supply and demand in the electric grid. To maintain the balance in the power system the system operator can activate power reserves to restore the balance at a frequency deviation. Today these reserves consist exclusively of hydropower in Sweden. With more volatile power generation new types of technologies to provide these reserves are desirable. The aim of this master thesis is to investigate the technical potential for using wind power, demand response and energy storage for automatic frequency control in the Swedish power system. The thesis examines the performance of the different technologies to see if they meet the technical requirements for delivering reserves set by the TSO. Moreover, the available capacity from the technologies throughout the year are estimated. The results show that all three technologies potentially could be used for frequency control. However, the technical requirements are not always fulfilled. In order to enable new technologies to provide power reserves some of the requirements needs to be modernized. Generally, demand response proved to have the largest available capacity for frequency control today. The study shows that demand response from industries and electric heated households could potentially provide all automatic frequency control. Modern wind turbines can be used for frequency control and for down regulation of the frequency the potential is considerable. Energy storages are not yet widely used in Sweden but with reduced costs they can play an important role in regulating the frequency in the future.

To meet new regulations and the demand for a more sustainable energy system, the electricity grid will play an important role. Since the grid owners operate in a monopoly environment a regulating authority, the Swedish Energy Markets Inspectorate (Ei), sets a revenue cap that determines their profits. Changes were made for the regulating period 2016-2019, which now states that grid operators no longer can charge their customers with already depreciated grid components. To spur the grid operators to invest in smarter and more efficient technology, Ei also introduced two new economic incentives to make companies decrease their electricity losses and use the grid more evenly. The first aim of this thesis was to investigate how this new regulatory framework affected the grid operators, by performing interviews and sending out a survey. The result showed that the new regulatory decreases the grid operators’ profitability and also affects their investment strategies. The age of a grid has become more important than both efficient use of the grid and voltage quality when considering investments, since age now has a major impact on the profits. The new incentives however, has almost no effect on the way the grid operators act. The second aim of this study was to investigate how much a grid operator could save with these new incentives. A case study were conducted at Upplands Energi, a small local grid operator, and calculations with their usage data were performed in MATLAB. The results showed that load management by installing control equipment on costumers’ heat pumps and thereby decreasing their power peaks, could save money. By connecting 500 customers Upplands Energi could save about 150 000 SEK per year, and with 5 000 customers they could save almost half a million SEK per year.

Electricity production from renewable energy resources such as wind energy and photovoltaics is variable. Integration of these intermittent resources into the electricity system leads to new challenges in how to manage imbalance between supply and demand on the grid. One way to meet these challenges is to develop so-called smart grid solutions. One idea, called demand response, is to adjust the amount or timing of energy consumption, e.g. by control of household appliances, to provide flexibility that could be used to balance the grid. In aggregate, when applied to many units across the system, large volumes of energy could be made available when needed and this grid flexibility can be used as a product on the electricity regulation market. Despite the potential benefits, the number of demand response bids is currently low. The aim of this thesis is to identify barriers in the Swedish regulation market, and togive Sweden's transmission system operator, Svenska kraftnät, recommendations on how to facilitate implementations of the technique. This has been done throughliterature studies and a wide range of interviews with people within the electricity market sector. The results indicate that a combination of several elements in the complex energy system impede the introduction of demand response. The main issues are related to market regulations and profitability difficulties. The authors recommend that Svenska kraftnät lowers the minimum bid size in all of the Swedish bidding areas, and adjusts the balance responsibility agreement and the system of balancing settlement.

More renewable energy leads to higher energy imbalances in the Swedish electric power system. In the same time, the grid capacity is almost reached in some regions which requires an extension of the current grids or a reduction of the power consumption. Demand response could be a key factor for both stabilizing the energy balances and reducing the grid congestion. The aim with this thesis is to analyze the potential incomes that demand response from heat pumps can generate for the balance responsibility parties and the grid operators and evaluate how it would affect the end-consumers.   The investigated local grid that contains of 174 multi-family buildings with heat pumps could reduce its highest peak power with 2,9 MW. This peak power reduction generated a cost reduction of 483 000 SEK per year or 2800 SEK per building per year in reduced penalty fees and power subscription fees. The mFRR market and the power reserve market were determined to be the most suitable markets for using demand response from heat pumps on for the balance responsibility party in the electricity price region SE3. SE3 consists of 10146 multi-family buildings with heat pumps. The mFRR market generated an average income of 2 699 000 SEK per winter season whereas the power reserve market generated a yearly administrative compensation of 1 133 000 SEK per season and 104 000 SEK per call-off. It is important that end-consumers obtain demand-based tariffs or hourly based tariffs to enable a cost reduction from the control system.

Increased use of variable energy and integration of electricity markets in the European Union have led to new challenges when balancing supply and demand in the grid. Load management is a possible way to manage these challenges by adjusting electricity consumption in order to balance the power system. Household appliances can be used for this purpose, for example by providing automatic frequency control. The aim of this master thesis is to investigate the potential of load management from private households and to examine how the power system is affected by a more flexible electricity consumption. The thesis focuses on fridges as automatic frequency control reserves and the ability of fridges to balance the power system. Attributes such as capacity, activation time, persistence and the effect of load reconnection has been modelled in Simulink, Matlab. Complementary interviews with actors from the electricity industry have been done to summarize their insights on demand response. The results indicate that fridges can be used as a part of the automatic frequency controlled reserve FCR-N, based on assumptions made in this study. However, current requirements imposed on balancing resources are not fully met by the fridges. In order for household appliances to provide the needed flexibility, some requirements might need to be rephrased. The results also show that the capacity for providing balancing services differs for positive and negative imbalances, as consumption can be reduced with 30 MW and increased with 66 MW. When controlling the fridges by moving the reference temperature, there is a risk that the appliances will synchronize with each other, i.e. reconnect or disconnect at the same time, resulting in frequency oscillations. It is therefore important that load management is designed to avoid this kind of behavior.

Increased use of variable energy and integration of electricity markets in the European Union have led to new challenges when balancing supply and demand in the grid. Load management is a possible way to manage these challenges by adjusting electricity consumption in order to balance the power system. Household appliances can be used for this purpose, for example by providing automatic frequency control. The aim of this master thesis is to investigate the potential of load management from private households and to examine how the power system is affected by a more flexible electricity consumption. The thesis focuses on fridges as automatic frequency control reserves and the ability of fridges to balance the power system. Attributes such as capacity, activation time, persistence and the effect of load reconnection has been modelled in Simulink, Matlab. Complementary interviews with actors from the electricity industry have been done to summarize their insights on demand response. The results indicate that fridges can be used as a part of the automatic frequency controlled reserve FCR-N, based on assumptions made in this study. However, current requirements imposed on balancing resources are not fully met by the fridges. In order for household appliances to provide the needed flexibility, some requirements might need to be rephrased. The results also show that the capacity for providing balancing services differs for positive and negative imbalances, as consumption can be reduced with 30 MW and increased with 66 MW. When controlling the fridges by moving the reference temperature, there is a risk that the appliances will synchronize with each other, i.e. reconnect or disconnect at the same time, resulting in frequency oscillations. It is therefore important that load management is designed to avoid this kind of behavior.

The Swedish energy power system is in the middle of a paradigm shift where the increased share of intermittent energy sources place higher demand on the ability to regulate and balance the generation and consumption of electricity. Demand flexibility, which means that consumers can adjust their energy consumption, is a promising solution to manage the imbalance in the power system. Electric heat pumps in residential buildings are recognized to have potential to serve as a flexible load. In this thesis, an aggregated multi-family residential building model is developed to generate heat load profiles for a larger number of buildings which facilitate an assessment of the heat pump flexibility. The flexibility assessment is performed for a local distribution grid area with 174 buildings and an electricity price region in Sweden with 10 146 buildings with heat pumps. The flexibility assessment analyses the heat pump load deviation between a base load case and a case where the heat pumps receive an off-signal. The assessment takes into consideration seven flexibility parameters and is conducted for ambient temperatures between -20°C and 15°C. The thermal inertia of multi-family residential buildings facilitates a load shift with a duration of 4.4 to 9.8 hours depending on the ambient temperature. The maximal average power reduction for one hour of 10 MW in a distribution grid and 169 MW in an electricity price region illustrates the potential of using heat pumps as a demand flexibility solution in the electricity grid.