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Maksym Bielawski. Implementation of the electricity demand management system in Ukraine. Part 1: Overview of global practices

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One of the strategies of post-war recovery of Ukraine is to modernize the domestic energy sector [1], which is inextricably linked with the need to implement modern practices to ensure the economy in fuel and energy resources in a technically reliable, safe, cost-effective and environmentally friendly way for consumers and society as a whole.

The energy system is built on the principle of instantaneous search for a balance between demand and generation, so maneuverability is a necessary condition for its stable operation. If it is violated, there will be an instantaneous loss of frequency and, accordingly, an interruption in the power supply.

Traditionally, the flexibility of power supply systems has been provided by electricity producers (thermal power plants, renewable energy sources, storage systems), which are able to quickly change the amount of generation in response to consumer needs.

However, the development of technology has allowed the developed world to increase the maneuverability of their energy systems at the expense of consumers through the introduction of demand management mechanism, which is to independently change the load schedule on the command of the transmission system operator or market conditions.

The most common model of consumer demand management is the licensing of companies that act as aggregators of demand management and represent the interests of consumer groups [2] in the market of ancillary services. Thus, such companies consolidate [3] the ability of their customers to change demand and realize this capacity in the relevant segment of the electricity market.

At the legislative level of the European Union, demand management issues are addressed in Directive 2012/27 / EU [4], in particular paragraph 15.8 explicitly states that EU regulators should encourage aggregators at the generation level in electricity markets.

In pursuance of this directive, 11 member states of the European Union [5] have already developed a regulatory framework for the operation of aggregates for electricity demand management. As a result, more than 22 GW of managed demand capacity is currently accounted for in Europe, but the European Commission estimates that this capacity will be increased to 160 GW by 2030.

France was one of the first European countries to manage electricity demand. Beginning in 2003, the first demand management operators appeared in the retail segment [6] with a limited capacity of up to 10 MW. In just ten years, in 2013, after legislative changes [7], demand management extended to French industrial consumers [8]. During 2015 and 2016, the amount of electricity that passed through demand management increased tenfold to 10.3 MWh. This trend has prompted the French government to equate aggregators of demand management with generation. As a result, a power compensation mechanism was introduced in 2017 [9], which required aggregators to reduce peak loads in exchange for certificates. Later, a tender mechanism was created to attract aggregators, industrial and commercial consumers for tertiary frequency control [10]. Today, demand management plays an important role in the French energy market, in particular in the ancillary services, the balancing market, the day-ahead market and the intraday market.

No less actively the trend of demand management is developing in the UK, in particular as of 2020, the share of demand management in the structure of balancing capacity of the British power system was 30% [11]. Participants include industrial and commercial consumers, as well as 20 aggregator companies, including Restore [12], Energy Pool [13], Limejump [14], Kiwi Power [15]. In general, demand management products are sold in the market of ancillary services (frequency regulation, reserve segment) and the power market.

In Germany, since 2016, network operators have been concluding weekly contracts with retail consumers [16] for demand management with a total capacity of 1.5 GW. This approach allows to stabilize the regimes, especially during the period of inclusion or disconnection of electricity producers from renewable sources.

Demand management also attracts the attention of other developed countries. For example, demand management programs in the United States have been in place since the oil crisis, in the 1970s. The first variation was the introduction of differentiated electricity tariffs given peak hours. Later, in 2005, demand management policy was mentioned in the Federal Energy Policy Act [17], and two years later the Federal Energy Security Act [18] regulated the national action plan. However, given the decentralized model of energy markets (each state has its own retail level, and there are several wholesale markets in the US [19]), current demand management practices are quite diverse. For example, wholesale In these markets, demand management is used to optimize the operation of power systems, so as of 2022, the capacity of aggregators was 50 GW or 10% of peak load. At the same time, the total demand management capacity in the US retail markets is 60 GW [20]. This difference between the available capacity is explained by the fact that in the US, demand management programs are widely involved in household consumers who participate in various programs of energy companies, including load management air conditioning, heating and heating [21]. Among the largest American aggregator companies are

The accident at the Fukushima nuclear power plant in 2011 was the impetus for the implementation of demand management programs in the Japanese energy market. After this incident, pilot projects were implemented at the retail segment level, which six years later grew into a full-fledged market [22]. Its model unites more than 10 aggregators [23], which use the technology of virtual power plants to manage the schedule of industrial and commercial consumers and sell the service to reduce the load on the market of ancillary services and balancing reserves. In general, the Japanese market for demand management, compared to 2017 (1 GW) will increase to 40 GW, which will reduce the energy intensity of the economy by 30% [24]. Blockchain technologies [25] and new configurations of intelligent power grids will be the drivers of growth.

The practice of managing energy market demand has been introduced by other countries in the Asia-Pacific region. For example, since 2014, South Korea has introduced a full-fledged consumer load management market based on the Korean Energy Exchange [26] under two programs: peak load reduction (system operator sends dispatch team to unload) and capacity sales through aggregators in the ancillary services market. To date, the practice of demand management in Korea is developing in accordance with the plan developed by 2030 [27].

The above-analyzed demand management practices allow them to be classified into three groups.

1. Resources and infrastructure. Among the demand management capacities, the share of generation from renewable energy sources is growing [28], and in decentralized urban systems the emphasis is on solar power plants [29]. Power distribution systems are designed taking into account dynamic load controllers, which play the role of voltage balance in the network [30]. Laying of new intelligent networks is carried out on the type of microgrid with cells for the formation of local cells of consumers [31] [32], and each household consumer is supplied with three-phase voltage with a drive [33]. In addition to storing electricity, cold air storage facilities are used, which are produced by the air conditioner at minimum load [34].

The introduction of demand management systems is impossible without dispatch control algorithms that perform the tasks of: simultaneous analysis of consumer demand, electricity prices and supply market ancillary services [35]; peak management [36]; frequency tracking in the power system [37]; the choice of the subscriber taking into account his history of consumption and minimal discomfort for the consumer [38].

2. Consumers. Demand management programs involve domestic, commercial, and industrial consumers, most of whom are aggregators. For example, in the household consumer sector, a cooperative scheme of connection to demand management programs is used for low-income subscribers [39]. At the same time, for consumers with medium and high levels of wealth, individual connection systems are used, which include household appliances, which start working depending on electricity prices [40]. The most effective participants in the demand management market are commercial and industrial consumers, who use the most flexible load program [41]. It is noteworthy that the development of the segment has led to the creation of a simulation model for forecasting the ability of different categories of consumers to work in the market of demand management [42]. It should be noted that the main condition for consumer participation is the availability of automated electricity metering systems.

3. Markets. The demand management market offers energy services that reduce peaks in the load curve [43]; regulate the frequency through the model of controlled loads [44]; increase the reliability of power grids with connected alternative energy facilities [45].

In general, demand management competes with the generation of reserves when power grids face unforeseen situations [46], so the development of this sector is an element of energy security of countries such as Canada and Japan.

Most of the analyzed countries use more than 5% of peak consumption capacity in demand management, and payment for aggregators' services is mainly set at a regulated tariff. One of the consequences of the introduction of demand management practices is a decrease in the average up to 15% of the weighted average price in the segment of the day-ahead market.

In this case, the method of settlements with consumers can be classified into three types: direct payment of the contribution to demand management; discount on the price of electricity or delivery service; a combination of direct payment and different types of discounts.

In addition to the positive aspects of demand management, there are challenges for the full application of such a model [47]. First of all, due to the financial capital intensity of projects for the reconstruction of consumer electricity networks, in particular the installation of expensive equipment. Secondly, each experience of implementing demand management practices is characterized by inertia in terms of consumer decision-making regarding its participation in this project.


The review allows to formulate criteria for mathematical modeling of the potential and forms of implementation of demand management practices in the electricity market of Ukraine.

[1] Білявський М.Л. Новий профіль енергетики України в контексті декарбонізації та післявоєнного відновлення / Центр Разумкова, 2022. Джерело -
[2] Споживачів, які здатні без збитків для власної діяльності змінювати графік споживання.
[3] Беруть на себе зобов’язання по оснащенню своїх клієнтів технічними засобами для миттєвої зміни графіку навантаження.
[4] Джерело -
[5] Франція, Фінляндія, Греція, Німеччина, Ірландія, Італія, Польща, Португалія, Румунія, Словенія, Іспанія. За даними The implementation of the electricity market design to drive demand side flexibility / SmartEn Monitoring Report, March 2022. Джерело -
[6] Побутові споживачі, які брали участь в пілотних проектах отримували грошову компенсацію за своєчасне зменшення обсягів споживання.
[7] Завдяки впровадженню механізму Notifications d’echange de blocs d’effacement (NEBEF), який передбачав регламент обміну повідомленнями між учасниками ринку для продажу попиту. Джерело -
[8] 8 січня 2014 р. паперова фабрика Norske Skog Golbey (NSG), розташована у Вогезах, погодилася знизити споживання електроенергії на 33,6 МВт майже на 2 години, протягом ранкового піку попиту: з 8 до 10 ранку.
[9] Джерело -
[10] Третинне регулювання частоти призначене для забезпечення постійної наявності первинних і вторинних резервів, поновлення вторинних резервів, які використані при вторинному регулюванні, для здійснення оперативного коригу- вання режиму, для оптимізації роботи енергосистеми.
[11] The Association for Decentralised Energy. Джерело -
[12] Один із лідерів європейського ринку первинного регулювання та контролю частоти, який агрегував 1,6 ГВт потужностей споживачів. Компанія працює на енергоринках Великобританії, Бельгії, Німеччини та Франції.
[13] Під управління знаходиться 2,5 ГВт потужностей споживачів, які загалом зібрані з ринків Туреччини, Польщі, Франції, Великобританії та Японії. Джерело -
[14] Дана компанія-агрегатор вирізняється тим, що вперше використала віртуальні електростанції в питаннях управління попитом. Примітно, що власником акцій Limejump є нафтогазовий концерн Shell. Джерело -
[15] Власником компанії-агрегатора Kiwi Power є французький холдинг Engie. Джерело -
[16] Джерело -
[17] Джерело -
[18] Джерело -
[19] Один із найбільших оптових ринків США – PJM. Продукти управління попитом поділяються на дві категорії – економічні та протиаварійні.
[20] Federal Energy Regulatorу Commission. Джерело -
[21] Джерело -
[22] Джерело -
[23] Найбільший агрегатор компанія Enernoc, який займає 10% японського ринку. Дана компанія працює в інших країнах світу, загалом портфель потужностей складає 6 ГВт від 8 тисяч абонентів. Джерело -
[24] Джерело -
[25] Білявський М.Л. Трансформація-2050: Що потрібно енергетичній галузі для діджиталізації? Джерело -
[26] Джерело -
[27] Джерело -,on%20coal%20and%20nuclear%20sources.
[28] Джерело -
[29] Rahman, M.; Arefi, A.; Shafiullah, G.M. Penetration Maximisation of Residential Rooftop Photovoltaic Using Demand Response. In Proceedings of the 2016 International Conference on Smart Green Technology in Electrical and Information Systems (ICSGTEIS), Bali, Indonesia, 6–8 October 2016.
[30] Джерело -
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[32] Джерело -
[33] Джерело -
[34] Jia, X.; Xia, Q.; Chen, Q.X. Piecewise Price Mechanism to Induce Demand Response in Smart Grid. In Proceedings of the 2012 China International Conference on Electricity Distribution (CICED), Shanghai, China, 10–14 September 2012; pp. 2–5.
[35] Sachdev, R.S.; Singh, O. Consumer’s Demand Response to Dynamic Pricing of Electricity in a Smart Grid. In Proceedings of the 2016 International Conference on Control, Computing, Communication and Materials (ICCCCM), Allahbad, India, 21–22 October 2016.
[36] Джерело -
[37] Bao, Y.-Q.; Li, Y. Optimal Design of Demand Response in Load Frequency Control. In Proceedings of the 2014 IEEE PES Asia-Pacific Power and Energy Engineering Conference (APPEEC), Hong Kong, China, 7–10 December 2014; pp. 2–5
[38] Jain, M.; Chandan, V.; Minou, M.; Thanos, G.; Wijaya, T.K.; Lindt, A.; Gylling, A. Methodologies for Effective Demand Response Messaging. In Proceedings of the 2015 IEEE International Conference on Smart Grid Communications (SmartGridComm), Miami, FL, USA, 2–5 November 2015; pp. 453–458
[39] Ma, K.; Hu, G.; Spanos, C. Cooperative Demand Response Using Repeated Game for Price-Anticipating Buildings in Smart Grid. In Proceedings of the 2014 13th International Conference on Control Automation Robotics & Vision (ICARCV), Singapore, 10–12 December 2014; pp. 10–12
[40] Джерело -
[41] Wollsen, M.G.; Kjergaard, M.B.; Jorgensen, B.N. Influential Factors for Accurate Load Prediction in a Demand Response Context. In Proceedings of the 2016 IEEE Conference on Technologies for Sustainability (SusTech), Phoenix, AZ, USA, 9–11 October 2016
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