Hierarchical market integration of responsive loads as spinning reserve

In this paper, a new market integration approach for responsive loads is proposed. Large, spatially-distributed populations of heat pumps, electric vehicles, and electrolyzers are integrated into the conventional security constrained economic dispatch formulation using a hierarchical load management policy. Regional pockets of responsive loads are aggregated into models that describe population dynamics as an equivalent virtual power plant. This demand-side virtual power plant is then integrated into the market as a new source of spinning reserves. The potential impact of reserve capacity supported by responsive loads on the operating characteristics of the power system is investigated using a bottom-up modeling framework. Results indicate that by supplying spinning reserve, responsive loads can increase the flexibility of existing resources within the active power portion of the market. The hierarchical market integration policy enhances both the technical and economic efficiency of the power system, reduces operating costs and emissions, and supports increasing levels of variable generation on the grid.