Decision model for sustainable electricity procurement using nationwide demand response

As part of the worldwide effort towards achieving sustainable energy generation, an increasing share of renewable energy sources are connected to the electricity networks. This intermittent electricity output from renewable energy resources causes changes in prices and feed-in volumes. One approach to compensate for the supply side fluctuations is the active management of the demand side via so-called Demand Response (DR). Demand Response is defined as providing incentives to electricity consumers to shift electricity consumption to the economically most favorable time. Analyzing such load shifts economically is challenging, as prices depend on the quantity requested. We analyze this interdependency by explicitly modeling the load dependence of electricity prices and thus develop a decision model for nationwide electricity expenses in the form of a quadratic optimization. Using real market data, we show a decrease in average electricity prices and price volatility.