Demand Bidding vs. Demand Response for Industrial Electrical Loads

Tang, Xin; O'Neill, Richard; Hale, Elaine; Baldick, Ross; Baldea, Michael

doi:10.1016/j.compchemeng.2024.108768

Demand Bidding vs. Demand Response for Industrial Electrical Loads

Journal Article · Fri Jun 14 00:00:00 EDT 2024 · Computers and Chemical Engineering

DOI:https://doi.org/10.1016/j.compchemeng.2024.108768· OSTI ID:2406873

Tang, Xin; O'Neill, Richard; ; Baldick, Ross; Baldea, Michael

We investigate a novel optimal demand bidding model for industrial loads based on an extended optimal power flow problem for the day-ahead market. The objective function accounts for generation costs and revenue resulting from the sale of products made by the bidder using electricity. As a bidding entity, the industrial load participates in electricity price formation, and is described using a model whose parameters can be determined mostly from public information. Constraints specific to industrial loads, such as satisfying product demand, are also included. The model is validated using simulations of a modified IEEE 24-bus reliability test case with a chlor-alkali plant as the load entity. We find that the proposed participation model, which is simple enough to include in grid dispatch software, performs well relative to other demand-side management strategies such as price-based demand response and cooperative scheduling of industrial load by the grid operator.

Research Organization:: National Renewable Energy Laboratory (NREL), Golden, CO (United States)

Sponsoring Organization:: USDOE Advanced Research Projects Agency - Energy (ARPA-E)

DOE Contract Number:: AC36-08GO28308; AC36-08GO28308

OSTI ID:: 2406873

Report Number(s):: NREL/JA-6A40-87966; MainId:88741; UUID:781fd5ab-adc7-486f-9a98-3d16a3287a13; MainAdminId:73187

Journal Information:: Computers and Chemical Engineering, Journal Name: Computers and Chemical Engineering Vol. 189

Country of Publication:: United States

Language:: English

References (36)

Cooperative optimal power flow with flexible chemical process loads Otashu, Joannah I.; Seo, Kyeongjun; Baldea, Michael AIChE Journal, Vol. 67, Issue 4 https://doi.org/10.1002/aic.17159	journal	February 2021
A decoupling strategy for protecting sensitive process information in cooperative optimization of power flow Varelmann, Tim; Otashu, Joannah I.; Seo, Kyeongjun AIChE Journal, Vol. 68, Issue 1 https://doi.org/10.1002/aic.17429	journal	October 2021
Evaluating the demand response potential of ammonia plants Kelley, Morgan T.; Do, Tam T.; Baldea, Michael AIChE Journal, Vol. 68, Issue 3 https://doi.org/10.1002/aic.17552	journal	January 2022
Introduction Huggins, Robert A. Energy Storage, p. 1-12 https://doi.org/10.1007/978-1-4419-1024-0_1	book	January 2010
The energy-efficiency gap What does it mean? Jaffe, Adam B.; Stavins, Robert N. Energy Policy, Vol. 22, Issue 10 https://doi.org/10.1016/0301-4215(94)90138-4	journal	October 1994
The potential of demand-side management in energy-intensive industries for electricity markets in Germany Paulus, Moritz; Borggrefe, Frieder Applied Energy, Vol. 88, Issue 2 https://doi.org/10.1016/j.apenergy.2010.03.017	journal	February 2011
Challenges and barriers to demand response deployment and evaluation Nolan, Sheila; O’Malley, Mark Applied Energy, Vol. 152 https://doi.org/10.1016/j.apenergy.2015.04.083	journal	August 2015
Optimal supply and demand bidding strategy for an aggregator of small prosumers Iria, José; Soares, Filipe; Matos, Manuel Applied Energy, Vol. 213 https://doi.org/10.1016/j.apenergy.2017.09.002	journal	March 2018
An MILP framework for optimizing demand response operation of air separation units Kelley, Morgan T.; Pattison, Richard C.; Baldick, Ross Applied Energy, Vol. 222 https://doi.org/10.1016/j.apenergy.2017.12.127	journal	July 2018
Grid-level “battery” operation of chemical processes and demand-side participation in short-term electricity markets Otashu, Joannah I.; Baldea, Michael Applied Energy, Vol. 220 https://doi.org/10.1016/j.apenergy.2018.03.034	journal	June 2018
Optimal demand response operation of electric boosting glass furnaces Seo, Kyeongjun; Edgar, Thomas F.; Baldea, Michael Applied Energy, Vol. 269 https://doi.org/10.1016/j.apenergy.2020.115077	journal	July 2020
Optimal operation of the hydrogen-based energy management system with P2X demand response and ammonia plant Klyapovskiy, Sergey; Zheng, Yi; You, Shi Applied Energy, Vol. 304 https://doi.org/10.1016/j.apenergy.2021.117559	journal	December 2021
Electricity cost and CO2 savings potential for chlor-alkali electrolysis plants: Benefits of electricity price dependent demand response Lerch, Philipp; Scheller, Fabian; Reichelt, David G. Applied Energy, Vol. 355 https://doi.org/10.1016/j.apenergy.2023.122263	journal	February 2024
A data-driven linear formulation of the optimal demand response scheduling problem for an industrial air separation unit Kelley, Morgan T.; Tsay, Calvin; Cao, Yanan Chemical Engineering Science, Vol. 252 https://doi.org/10.1016/j.ces.2022.117468	journal	April 2022
Demand response-oriented dynamic modeling and operational optimization of membrane-based chlor-alkali plants Otashu, Joannah I.; Baldea, Michael Computers & Chemical Engineering, Vol. 121 https://doi.org/10.1016/j.compchemeng.2018.08.030	journal	February 2019
Optimal demand response scheduling of an industrial air separation unit using data-driven dynamic models Tsay, Calvin; Kumar, Ankur; Flores-Cerrillo, Jesus Computers & Chemical Engineering, Vol. 126 https://doi.org/10.1016/j.compchemeng.2019.03.022	journal	July 2019
Optimal scheduling of a large-scale power-to-ammonia process: Effects of parameter optimization on the indirect demand response potential Hochhaus, Thorben; Bruns, Bastian; Grünewald, Marcus Computers & Chemical Engineering, Vol. 170 https://doi.org/10.1016/j.compchemeng.2023.108132	journal	February 2023
Demand side management: Benefits and challenges Strbac, Goran Energy Policy, Vol. 36, Issue 12 https://doi.org/10.1016/j.enpol.2008.09.030	journal	December 2008
How renewables will change electricity markets in the next five years Schleicher-Tappeser, Ruggero Energy Policy, Vol. 48 https://doi.org/10.1016/j.enpol.2012.04.042	journal	September 2012
Projecting the Future Levelized Cost of Electricity Storage Technologies Schmidt, Oliver; Melchior, Sylvain; Hawkes, Adam Joule, Vol. 3, Issue 1 https://doi.org/10.1016/j.joule.2018.12.008	journal	January 2019
Optimization-based assessment of design limitations to air separation plant agility in demand response scenarios Cao, Yanan; Swartz, Christopher L. E.; Baldea, Michael Journal of Process Control, Vol. 33 https://doi.org/10.1016/j.jprocont.2015.05.002	journal	September 2015
Demand response and smart grids—A survey Siano, Pierluigi Renewable and Sustainable Energy Reviews, Vol. 30 https://doi.org/10.1016/j.rser.2013.10.022	journal	February 2014
Benefits and challenges of electrical demand response: A critical review O׳Connell, Niamh; Pinson, Pierre; Madsen, Henrik Renewable and Sustainable Energy Reviews, Vol. 39 https://doi.org/10.1016/j.rser.2014.07.098	journal	November 2014
Optimal Process Operations in Fast-Changing Electricity Markets: Framework for Scheduling with Low-Order Dynamic Models and an Air Separation Application Pattison, Richard C.; Touretzky, Cara R.; Johansson, Ted Industrial & Engineering Chemistry Research, Vol. 55, Issue 16 https://doi.org/10.1021/acs.iecr.5b03499	journal	April 2016
Stochastic Scheduling and Control Using Data-Driven Nonlinear Dynamic Models: Application to Demand Response Operation of a Chlor-Alkali Plant Simkoff, Jodie M.; Baldea, Michael Industrial & Engineering Chemistry Research, Vol. 59, Issue 21 https://doi.org/10.1021/acs.iecr.9b06866	journal	April 2020
An energy-efficient two-stage hybrid flow shop scheduling problem in a glass production Wang, Shijin; Wang, Xiaodong; Chu, Feng International Journal of Production Research, Vol. 58, Issue 8 https://doi.org/10.1080/00207543.2019.1624857	journal	June 2019
Real-Time Demand Bidding for Energy Management in Discrete Manufacturing Facilities Li, Yi-Chang; Hong, Seung Ho IEEE Transactions on Industrial Electronics, Vol. 64, Issue 1 https://doi.org/10.1109/TIE.2016.2599479	journal	January 2017
A decentralized solution to the DC-OPF of interconnected power systems Bakirtzis, A. G.; Biskas, P. N. IEEE Transactions on Power Systems, Vol. 18, Issue 3 https://doi.org/10.1109/TPWRS.2003.814853	journal	August 2003
Market-Clearing With Stochastic Security— Part II: Case Studies Bouffard, F.; Galiana, F. D.; Conejo, A. J. IEEE Transactions on Power Systems, Vol. 20, Issue 4 https://doi.org/10.1109/TPWRS.2005.857015	journal	November 2005
MATPOWER: Steady-State Operations, Planning, and Analysis Tools for Power Systems Research and Education Zimmerman, Ray Daniel; Murillo-Sanchez, Carlos Edmundo; Thomas, Robert John IEEE Transactions on Power Systems, Vol. 26, Issue 1 https://doi.org/10.1109/TPWRS.2010.2051168	journal	February 2011
Demand Side Frequency Control Scheme in an Isolated Wind Power System for Industrial Aluminum Smelting Production Jiang, Hao; Lin, Jin; Song, Yonghua IEEE Transactions on Power Systems, Vol. 29, Issue 2 https://doi.org/10.1109/TPWRS.2013.2284032	journal	March 2014
Optimal Demand Bidding for Time-Shiftable Loads Mohsenian-Rad, Hamed IEEE Transactions on Power Systems, Vol. 30, Issue 2 https://doi.org/10.1109/TPWRS.2014.2338735	journal	March 2015
Price-Maker Economic Bidding in Two-Settlement Pool-Based Markets: The Case of Time-Shiftable Loads Kohansal, Mahdi; Mohsenian-Rad, Hamed IEEE Transactions on Power Systems, Vol. 31, Issue 1 https://doi.org/10.1109/TPWRS.2015.2405084	journal	January 2016
Constructing Demand-Side Bidding Curves Based on a Decoupled Full-Cycle Process Ruan, Guangchun; Zhong, Haiwang; Shan, Baoguo IEEE Transactions on Smart Grid, Vol. 12, Issue 1 https://doi.org/10.1109/TSG.2020.3012562	journal	January 2021
Energy Storage McLarnon, F. R.; Cairns, E. J. Annual Review of Energy, Vol. 14, Issue 1 https://doi.org/10.1146/annurev.eg.14.110189.001325	journal	November 1989
Demand Response Programs in Multi-Energy Systems: A Review Vahid-Ghavidel, Morteza; Javadi, Mohammad Sadegh; Gough, Matthew Energies, Vol. 13, Issue 17 https://doi.org/10.3390/en13174332	journal	August 2020

Similar Records

A grid-scale study of demand bidding by large industrial users

Journal Article · Mon Oct 13 20:00:00 EDT 2025 · Computers and Chemical Engineering · OSTI ID:3012473

Bidding strategy for microgrid in day-ahead market based on hybrid stochastic/robust optimization

Journal Article · Thu Dec 31 19:00:00 EST 2015 · IEEE Transactions on Smart Grid · OSTI ID:1265375

A Demand Bidding Model for Multi-Product Industrial Plants

Journal Article · Wed Aug 20 00:00:00 EDT 2025 · Computers and Chemical Engineering · OSTI ID:2588743

Related Subjects

MATHEMATICS AND COMPUTING
chlor-alkali
demand bidding
demand response
optimal power flow
production cost modeling
welfare maximization

Demand Bidding vs. Demand Response for Industrial Electrical Loads

Citation Formats

References (36)

Similar Records

Related Subjects