Interactions between Demand Response and Network Expansion Planning: A Quantitative Analysis

Amid a growing worldwide decarbonization drive, the electricity sector is set to accommodate a significant amount of clean energy resources, the majority of which is available and needs to be connected in remote locations. This would naturally trigger huge investment needs in transmission infrastructures. Exploring options that minimize such investments should therefore be an integral part of transmission expansion planning. One such option is demand side flexibility. Qualitatively speaking, the potential of such flexibility, in terms of postponing or even avoiding investment needs, can be immense. In this paper, we provide numerical evidence with regards to the synergies between demand response and network expansion planning for a case study based on the Irish transmission system. Our work quantifies the extent to which different penetration levels of demand response influence network investment decisions. Numerical results reveal that, in a twelve-year planning horizon, only 2.5% reduction in peak energy demand in the considered system leads to nearly 30% reduction in the number of lines required to be built by the end of the planning horizon.