Demand side flexibility from residential heating to absorb surplus renewables in low carbon futures

Higher penetration of renewable sources of energy is essential for mitigating climate change. This introduces problems related to the balance of supply and demand. Instances in which the generation from intermittent and inflexible sources is in excess of system load are expected to increase in low carbon futures. Curtailment is likely to involve high constraint payments to renewable sources, and failing to curtail threatens the stability of the system. This work investigates a solution that makes use of residential heating systems to absorb the excess generation. Consumers are incentivised to increase consumption via a demand turn up mechanism that sets the electricity price to zero when excess generation occurs. The reduction in electricity price significantly weakens the economic case of dwelling-scale micro-cogeneration units. But technologies that use electricity are able to charge the thermal store when free electricity is available and discharge it when electricity prices are high. Such actions reduce the equivalent annual cost by 50 percent for a resistive heater and by 60 percent for a heat pump. Without disincentives, resistive heaters are likely to be chosen over heat pumps since they are easy to install, do not involve high upfront costs and can provide significant economic benefits.