Model-based Approaches to Demand Curtailment Allocation

Demand curtailment is a last resort option to maintain the balance between generation and load in a power system. During these rare events, operators need to decide the magnitude and location of curtailed demand. In the context of the large European power system, this raises multiple questions related to the use of the network, the resulting welfare, and fairness towards all consumers. Currently, the market coupling algorithm allocates demand curtailment between affected zones pro-rata based on their willingness to buy at the maximum price while minimizing overall curtailment and guaranteeing that no affected zone has to export simultaneously. However, using the flow-based approach to cross zonal capacity representation exposes the complexities of the power network, resulting in the location of demand curtailment affecting the necessary magnitude.In this paper, we propose models that can accurately portray these rules, discuss the design challenges and quantify their impact on an illustrative example system. We found that a minimal amount of total curtailment can be achieved if the location is selected based on the zone’s impact on network congestion. This method, however, disproportionately allocates the burden to often smaller zones, resulting in hard-to-manage high curtailment ratios. Aiming for equal curtailment ratios between the affected zones results in significantly larger overall volumes and curtailment events spreading to neighbouring zones more easily.