Estimating Energy Reduction Amount in the Event of Demand Response Activation: Baseline Model Comparison for the Baltic States

Demand response integration in energy markets can provide significant financial saving for grid operators and market participants and promote optimal resource allocation. An important step towards the integration is the introduction of methodology estimating energy transferred via demand response activation event. In essence, a consumption baseline model is a mathematical forecast of the energy consumption pattern that would have occurred in the absence of demand response event. These calculations are then used as the basis for the financial settlement among different market parties - consumers, aggregators, system operators and balance responsible parties. Currently there is no universal consensus on the best consumption baseline model and approaches used, differ wildly even among countries with relatively high demand response commercial activity. The objective of this paper is to compare different consumption baseline methodologies in terms of accuracy and robustness while taking into account the unique challenges within the Baltic region. For the comparative analysis we use hourly consumption patterns of one year for 40 different types of consumers. The analysis suggest that from the consumption baseline models reviewed, UK model performs the best in terms of accuracy and robustness.