Energy Efficient Residential Areas

through Smart Grids

E.A.M. (Elke) Klaassen, Else Veldman,
J.G. (Han) Slootweg, and Wil L. Kling
Electrical Energy Systems group
Eindhoven University of Technology
Eindhoven, The Netherlands
E.A.M. (Elke) Klaassen, Else Veldman,
and J.G. (Han) Slootweg
Asset Management
Enexis B.V.
s Hertogenbosch, The Netherlands

Abstract--The transition towards a more sustainable energy
supply system requires more flexible and efficient operation of
the electricity distribution grids. By using demand side
management energy efficiency in residential areas can be
increased. In this paper the potential of demand side
management from the perspective of the distribution system
operator is discussed. Consequently it is illustrated how smart
grid pilots in residential areas are designed in order to validate
this potential, by investigating the customers change in
electricity consumption, and to show the impact of different
demand side management approaches. Insights into the
opportunities of smart grids validated with the experience
gained during the pilots, can support distribution system
operators to develop their grids and determine future
investment strategies.
Index Terms--Energy efficiency, load management, distributed
power generation, power distribution, smart grids.

I. INTRODUCTION
Due to a changing power sector, the electricity use at
residential areas is expected to undergo two developments in
the coming decades: (i) the amount of distributed (renewable)
generation will increase, (ii) there will be an increasing
electrification of energy consumption, due to an expected
widespread introduction of (energy efficient) technologies
such as electric vehicles and heat pumps. Without active
steering of electricity demand, this will result in increased
peak power transfer flows, which will consequently increase
price volatility for both the energy supplier and the system
operator (including the transmission system operator,
distribution system operators and market operators). Therefore
the transition towards a more sustainable energy supply
system requires more flexible and efficient operation of the
electricity distribution grids. It calls for smart grids with
embedded intelligent control, making active steering of
electricity demand possible, referred to as Demand Side
Management (DSM). DSM aims at shaping the demand for
power according to an optimization process which addresses
specific objectives. If DSM is well applied, this contributes to
energy efficient residential areas.
There are various goals that can be reached through DSM
that can benefit various parties. For example, as a consequence
of an increase in fluctuating and intermittent renewable
generation, it will become increasingly difficult to balance
supply and demand. Therefore DSM can be applied by
balance responsible parties in order to reduce imbalance. On
the other hand, energy suppliers can use DSM to realize
economic optimization at electricity spot markets. In addition,
DSM is of interest to the Distribution System Operator (DSO)
because an increase in electrification will lead to increasing
network (peak) loads. This combined with the development of
more distributed generation connected to the electricity
distribution grids, offers opportunities for DSM to leverage
local supply and demand, allowing more electricity to be
transported without the need to provide grid capacity for high
load peaks. This will also increase efficient use of our energy
resources in residential areas and reduce energy losses related
to the transportation of electricity. As current electricity
distribution systems have a relatively low ratio of used
capacity to available capacity, a great potential is available for
transferring extra electrical energy with the existing capacity
of the grid [1].
To support decision-making for implementing certain
DSM technologies, insights into the opportunities of smart
grids as well as into the impact of the large-scale application
of these new technologies on the grid is needed. In this paper
the potential contribution of smart grids in residential areas to
the DSO objectives is discussed, consequently it is illustrated
how smart grid technologies are tested in the real world in
various smart grid pilot projects. In these pilots, a special
focus is on the behavior of actual customers to investigate if
and how they can be motivated, in order to realize the
potential benefits and to gain better understanding of the
opportunities and risks. The smart grid pilots will show to
what extend the demand for power of customers can be
shaped. In the pilot projects which will be treated in the paper,
DSM objectives are translated into different designs for smart
grids in residential areas in the Netherlands. These pilots make
it possible to define the impact of DSM in different settings in
which simultaneous optimization of the goals of various
stakeholders is applied in different ways. It is important to
This research has been partially performed within the framework of
the IPIN research program Innovatie Programma Intelligente Netten that is
supported financially by Agentschap NL. Agentschap NL is an agency of the
Dutch Ministry of Economic Affairs.
978-1-4799-1303-9/13/$31.00 2013 IEEE
have different stakeholders involved in the projects, as the
value of DSM will increase if objectives are combined,
although the costs and benefits from DSM are not the same for
every stakeholder, and at times individual interests can be
conflicting [2].
II. DSM OPPORTUNITIES FROM THE PERSPECTIVE OF A
DSO
A. DSM Objectives for a DSO
From the perspective of a DSO it becomes increasingly
clear that active management of the distribution grids to adapt
the grids to future developments is the economically feasible
solution to continue reliable delivering of electricity and to
facilitate the integration of distributed generation and
increasing electrification [3].
At residential areas DSM can play an important role in
these future distribution grids to support the DSO to make the
grid ready to adapt to future developments. By applying DSM
it is possible to use the flexibility of electricity demand, for
example to reduce peak loads by spreading the charging rate
cycles of plug-in (hybrid) electric vehicles or to use locally
generated electricity at times when it is available. This can
support capacity management at residential areas to reduce
peak loads and reduce network investments. Besides that,
using local available electricity locally can relieve networks
and reduce transportation of electricity and thus reduce energy
losses.
B. Contribution of DSM in Residential Areas
In previous work, [4], it has been shown what applying
smart grid strategies to reduce residential peak loads can mean
for the required capacity of the distribution grids by using a
scenario-based methodology to model future residential
electricity demands.
In future residential areas of the Netherlands an (average)
peak demand of 0.89-1.30 kW per household can be expected
in 2040, following the conventional network planning method,
in which a 1% load growth of the current residential electricity
use is taken into account. It is shown that for various scenarios
considered in this research, the peak demands for electricity in
future residential areas towards 2040 will be higher compared
to this situation. These demands can, however, differ
significantly per scenario.
Three different, but all realistic scenarios that have a very
different impact on the distribution grids are defined. In the
first scenario, Scenario A, a small economic growth and
mainly centralized production is expected. There will be no
growth in the residential electricity demand for normal
household appliances. Nonetheless, the overall electricity
demand will increase due to the introduction of new
technologies like electric vehicles, although the market
penetration of these new technologies will not grow fast. In
Scenario B, the economic growth is high and both central
electricity generation and distributed electricity generation
will increase. Also, the electricity demand will increase and
many new technologies are expected in residential areas. In
the third scenario, Scenario C, the applied energy policies
have a local and environmental focus. This leads to a high
share of distributed generation and an increase in energy
efficient technologies in residential areas. Measures leading to
energy savings limit the energy demand growth.
For these three scenarios aggregated residential electricity
demand profiles are modeled on the level of an medium to
low voltage (MV/LV) transformer to which on average 70
customers are connected. In Fig. 1 the electricity profiles are
shown for a winter day when the electricity demand is
maximum. Because the residential demand varies for old and
new houses, but also for various types of houses, like an
apartment or a detached house, the average peak load in
various types of residential areas have been determined. It has
been estimated that the residential peak demands in 2040 will
vary between 0.89-2.03 kW per household in Scenario A
compared to 1.96-3.60 kW in Scenario B. In Scenario C the
peak loads lay in between these values and are 0.93-2.91 kW
per household.

Fig. 1. Aggregated residential electricity demand profiles in 2040 in the
Netherlands for three different scenarios (scaled back to one household).

A strategy for network operators to cope with these changes
in residential electricity demand, and to optimize the
utilization of their grids is to use DSM to shift demands in
order to reduce peak loads. This includes charging cars during
night hours, spreading the electrical demand for heat pumps
by buffering heat and having smart appliances like smart
washing machines running when demand is low. In [4] it is
shown that if these demands can be managed in such way, the
electricity profiles during winter can be flattened significantly
and the peak load in 2040 at the MV/LV-transformers which
supply residential areas is reduced by 35-67%, depending on
the scenario. Accordingly load-flow analyses of medium
voltage networks show that DSM can realize a reduction of
21-40% for required capacity of medium voltage (MV) cables
and transformers.
It is also estimated what this means in terms of investment
costs. This has been calculated for 48 MV distribution
networks that serve 920,000 residential customers. The results
are shown in Fig. 2. This shows that applying DSM to reduce
peak loads makes a reduction of 45-72% in investment costs
possible in all scenarios, with regard to required capacities for
MV/LV-transformers that supply residential areas, MV cables
and medium to high voltage (HV/MV) transformers.
These results underpin that using smart grids in residential
areas can increase the capacity usage of the electricity
distribution system which results in more efficient use of our
energy resources.

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which the customer would have paid a yearly fixed capacity
tariff, which is 169.36 (incl. taxes). In Fig. 4. an example is
given of the predicted load and PV production, scaled back to
one household, and the corresponding tariff scheme for that
day is shown.

Fig. 4. Predicted load and PV production (scaled back to one household) and
the corresponding tariff scheme applied in the pilot Your Energy Moment.
Your Energy Moment goes live December 2012 at two
locations in the Netherlands, i.e. Breda and Zwolle. In Breda
149 customers are participating and in Zwolle there are 103
participants. During the pilot the electricity consumption and
behavior of each participant is monitored, using a smart meter
and the information on usage of the display and smart washing
machine. Furthermore, the load at the MV/LV-transformers
and the feeders to which the customers are connected is
measured. This data will make it possible to define the
aggregated reduction of peak load of the participants and the
reduction of the peak load at MV/LV- transformer level. There
is a difference between both, as there are also customers
connected to the transformer who are not participating. Your
Energy Moment will show how customers react on incentives,
and the question if the customer is willing and able to adjust
his electricity demand to the (local) available generation and
network capacity, will be answered in this context. As the
pilot duration is two years, the short and long term effect of
behavioral change is studied. Using the pilots results, the
contribution of this DSM architecture to the objectives of the
DSO can be defined and the outcomes of the research
presented in the previous section can be validated.
B. PowerMatching City
The PowerMatching City pilot consists of two phases; in
phase-I, launched in 2010, 25 households in Hoogkerk, the
Netherlands, were interconnected [5]. A market model for
intelligent network operation under normal conditions was
developed. The coordination mechanism in this model was
provided by the multi-agent based PowerMatcher technology,
which allows simultaneous optimizations of the objectives of
different stakeholders [5]. The PowerMatcher balances energy
demand and supply, using the flexibility of household
appliances, such as -CHPs, hybrid heat pumps, smart
appliances (i.e. smart washing machines and smart
dishwashers) and electric vehicles. The loads of the
households are interconnected into a virtual power plant; by
continuously altering the balance between energy production
and demand for example the dispatch of costly spinning
reserves can be prevented. The priority of a device to turn on
or off is translated into a bid-price-curve; these curves are
aggregated and consequently the market mechanism decides
whether the devices are turned on or off by communicating
back the market clearing price. In the smart city created in
phase-I power was produced by PV panels, a wind turbine,
micro-CHPs and a mini gas turbine. In this first phase it was
shown that the objectives of various stakeholders can be
achieved in different ways, using living lab demonstrations in
Hoogkerk [7]. Optimization goals such as the reduction of
imbalance are reached without compromising on customers
comfort. Furthermore, technical coordination by the DSO is
possible. In this case the DSO enables a bid-price-curve
transformation in order to manage local congestion and limit
the import or export of electricity of a network section [5].
Objectives can be conflicting, e.g. the objectives of the DSO
can conflict with those of the balance responsible part if local
congestion occurs while the balance responsible party has a
long position on the national grid; in this case, the DSO will
alter local price signal and reduce power consumption of this
section of the grid. The multi-goal optimization topology of
PowerMatching City is shown in Fig. 5.

Fig. 5. The multi-goal optimization topology of the intelligent network of
PowerMatching City [5].
10 20 30 40 50 60 70 80 90
0
0.2
0.4
0.6
0.8
Timeslot (15 minutes)
L
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(
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10 20 30 40 50 60 70 80 90
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Load (kW)
PV production (kW)
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Energy taxes
Energy tariff
Network tariff
In the second phase, which started in 2011, the focus is on
new business models based on the technical infrastructure of
phase-I. Integration of the market model into the regular
energy market processes like allocation, reconciliation and
billing is need to achieve this [7]. The living lab environment
will be scaled up with about 20 households. These households
are located behind the same MV/LV- transformer, which
enables management of the distribution station. The load at the
transformer and the feeders to which the customers are
connected will be actively measured. The DSO Enexis is
involved in phase-II and capacity management will be
integrated in the market model which operates in regular
energy market processes. Based on the (predicted) load of the
transformer and feeders incentives are given to the customers
connected to the distribution station if there is the need to
reduce or increase the residential load.
These incentives can be soft (price) incentives or hard
(curtailment) incentives, however, as the second phase is
integrated in regular energy market processes, the costs of the
DSO associated with active capacity management need to be
in line with the current market model and only soft price
incentives are considered. Baseline here can also be the
currently applied yearly fixed capacity tariff for the customer.
In the PowerMatcher model the incentives of the DSO that
will lead to a horizontal scale of the aggregated bid curves is
considered, as this will prevent congestion and reduce energy
transport losses [8]. Optimizing asset capacity investments can
be considered a higher level goal, which is roughly realized by
performing the latter two goals [8]. Using the market model
developed in PowerMatching City, the DSO can provide
insight into the costs associated with active capacity
management and find a balance between investing in
additional network capacity or recurring congestion costs.
Furthermore, in phase-II the cost and benefits of the DSM
architecture for all the involved stakeholders will be defined,
determining the financial effect of the PowerMatcher over a
longer period of time.
IV. PLANS AND PERSPECTIVES
As described in this paper the DSO Enexis is involved in
two smart grid pilots, i.e. Your Energy Moment and
PowerMatching City. The different DSM architectures and the
role of the DSO in this context are illustrated. In Your Energy
Moment the DSO provides a financial incentive to the
customers in order to reduce peak loads and match local
(flexible) demand with locally produced electricity. This
financial incentive, a dynamic capacity tariff, is based on the
forecasted load at the MV/LV-transformer. Your Energy
Moment focusses on changing customers behavior,
PowerMatching City on the other hand focusses on technology
automation. Requiring a different DSM approach of the DSO,
as here a real-time market model is used and financial
incentives designed in such a way could lead to undesired
energy rebound effects. In PowerMatching City the incentives
of the DSO transform the aggregated bid curve in situations in
which the load becomes high.
In both pilots simultaneous optimization of the goals of
various stakeholders is applied in different ways, and the field
tests will show the impact of DSM in these different settings.
Using the results of the pilot studies it will determined to what
extent residential customers are willing and able to shift their
electricity demand, in order to pursue certain DSM objectives.
By studying also the long term effect of behavioral change on
residential load, the contribution of the DSM approach to
reduce the peak load will be investigated in both settings.
Furthermore, the factors of influence on this peak load
reduction will be determined, and the associated costs of peak
load reduction are studied.
In part II it was illustrated how reductions in investment
costs due to DSM can be determined based on scenarios for
future peak demand growth and the corresponding peak load
reduction potential in these scenarios. The latter peak load
reduction potential in the different scenarios can be validated
with the outcomes of the pilot studies. Using the insights into
the opportunities of smart grids in residential areas validated
with the pilots results, supports the DSO to define future
strategies concerning DSM and capacity investments.
The pilot projects will also demonstrate the technologies
which will be implemented in the long term when smart grids
are rolled out and attention is paid to issues related to the
institutional arrangement and the social and economic aspects
of the different designs of smart grids. In general, it is studied
what the roles and responsibilities of different stakeholders in
smart grids are, what the costs and benefits of the pilot
projects are, and how the allocation of costs and benefits must
be arranged in the future.
ACKNOWLEDGMENT
The authors gratefully acknowledge the contributions of all
partners and participants involved in PowerMatching City
and Jouw Energie Moment, who make it possible to test
concepts and ideas in a living lab environment.
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