The economic potential of Demand Response in liberalised electricity markets – A quantitative assessment for the French power system.

Summary In the electricity industry, the technological progress brought about by smart grids is challenging the idea that consumers cannot react to wholesale market prices. However, the integration of Demand Response (DR) into the power system is challenged by the question of its economic efficiency. This thesis evaluates the economic value of DS by using an energy market model under uncertainty to calculate the profits of an aggregator, by consumer class and end-use. The model belongs to the class of linear stochastic multi-period problems. Its resolution is based on Stochastic Dual Dynamic Programming. It appears that in France, the profitable sectors are the industrial load-shedding and the load-shifting of cement and paper. The load-shifting of electric heating is not profitable for the tertiary and residential sectors. In addition, the capacity value of DEs is critical. Overall, DEs are becoming viable, but the development of their potential seems to be conditional on a decrease in fixed costs in smart grid technologies.