Agent-Based Modelling of Demand-Side Flexibility Adoption in Reservoir Pumping

Abstract

As wind and solar power displace conventional generation in the electricity grid, there is an urgent need for technologies that can deal with the variation in supply. Demand response technology has been proposed as a solution to make the demand-side flexible and able to effectively adjust to variations in supply. However, consumers do not simply invest in demand response technologies without insurance that their investment will pay back. This paper applies agent-based simulation to investigate consumer adoption behaviour of implicit demand response solutions that allow consumers to adjust their electricity use to the hourly prices in day-ahead spot markets. The simulation uses the case study of a water supply system to show that the adoption speed of implicit demand response technology depends on both technical characteristics of the system and the business model of the implicit demand response solution provider. Hence, this paper contributes with insight on how agent-based simulation can help technology providers to design solutions which match the needs of system operators.