Levelised cost of demand response: Estimating the cost-competitiveness of flexible demand
Year: 2025
Type: article
Abstract: To make well-informed investment decisions, energy system stakeholders require reliable cost frameworks for demand response and storage technologies. While the levelised cost of storage permits comprehensive cost comparisons between different storage technologies, no generic cost measure for the comparison of different demand response schemes exists. This paper introduces the levelised cost of demand response, which is an analogous measure to the levelised cost of storage but crucially differs from it by considering consumer reward payments. Additionally, the value factor from cost estimations of variable renewable energy is adapted to account for the variable availability of demand response. The levelised cost of demand response is estimated for four direct load control schemes and twelve storage applications, and then contrasted against literature values for the levelised cost of the most competitive storage technologies. The direct load control schemes are vehicle-to-grid, smart charging, smart heat pumps, and heat pumps with thermal storage. The results show that only heat pumps with thermal storage consistently outcompete storage technologies, with EV-based schemes being competitive for some applications. The results and the underlying methodology offer a tool for energy system stakeholders to assess the competitiveness of demand response schemes even with limited user data. • The levelised cost of demand response compares the costs of load control and storage. • The framework includes consumer payments based on stated-choice experiment literature. • Schemes: vehicle-to-grid, smart charging, smart heat pump, heat pump + heat storage. • Heat pump + heat storage is cheaper than any other demand response or storage option. • Vehicle-to-grid and smart charging are competitive with storage for some applications.
Source: Energy Conversion and Management
Authors: Jacob Thrän, Tim C. Green, Robert Shorten
Institution: Imperial College London
Language: English
Topic: Smart Grid Energy Management
Subfield: Electrical and Electronic Engineering
Field: Engineering
Domain: Physical Sciences
Open Access status: hybrid
Estimated APC paid: $4,600
OpenAlex ID: W4416808043