Flexibility provision by thermal loads

Heat pumps, especially when combined with thermal or even electric storage, can be ramped up or down to provide grid-balancing services to both transmission and distribution system operators without affecting consumers’ comfort. Adjustments can be made at intervals as short as a few seconds to regulate frequency, or over minutes to hours to balance supply and demand. Heat pumps combined with storage also offer reserves to cover contingencies over longer periods. These services typically require aggregating the thermal loads of multiple end users to reach a critical volume sufficient to participate in the market. DHC systems are particularly effective at providing flexibility because customers are already aggregated on the thermal grid; also, the network itself provides thermal inertia, and is under central control.

To allow heat pumps or other power-to-heat technologies to provide grid-balancing services, regulations should:

• Lower the minimum capacity requirement for participation in these markets, or allow aggregators to bundle small assets and participate in the market; and
• Allow demand-side participation in the grid-balancing markets.

The ability to control heat pumps and other thermal loads on short or long-time scales offers multiple benefits. Both industrial and residential consumers can reduce their energy costs by adjusting their energy needs as electricity prices change. They can also receive additional revenue by providing flexibility to electricity grids. Meanwhile, the flexibility helps balance the grid and enables the integration of greater shares of variable renewables in the system.