An investigation into the economic benefits of fast-timescale demand response using thermostatically controlled loads on the NEM

Amongst the many innovations for improving grid performance and stability is the concept of Fast-Timescale Demand Response (FTDR), which is particularly suited for appliances which have the capacity to store energy in the short term. In particular, domestic thermostatically-controlled loads (TCL), such as air-conditioners, are excellent candidates for FTDR. FTDR has the potential to reap financial benefits in the form of reduced running costs, but also may allow increased uptake of renewable energy by supplying grid-supporting services. The potential benefits of TCL-enabled FTDR has led to this idea being explored overseas, and this paper investigates the concept with reference to the Australian context. Along with geographically appropriate data and various optimisation methods, a computation framework is implemented here to calculate potential financial benefits to such a scheme. Specifically, by utilising 28 days of summer temperature readings for various locations around Sydney, it is found that an FTDR scheme as proposed yields a negative cost benefit, adding approximately 85% to these devices' running costs. We conclude that this is due to the inherent design of the models and framework used, in that they promote nonoptimal system behaviours. As such, it should be noted that these methods here possess several limitations, which need further study in order to be addressed, as a real system should yield a benefit.