Value and granularity of ICT and smart meter data in demand response systems

- Derivation of the optimal read-out frequency for smart meter data.
- The cost-value model is based on the ICT design of a demand response system.
- Profits exceed variable costs for a readout interval between 21 to 51 minutes.
- Demand response is only profitable for large customers.

The large-scale integration of intermittent resources of power generation leads to unprecedented fluctuations on the supply side. An electricity retailer can tackle these challenges by pursuing strategies of flexible load shifting - so-called demand response mechanisms. This work addresses the associated trade-off between ICT deployment and economic benefits. The ICT design of a demand response system serves as the basis of a cost-value model, which incorporates all relevant cost components and compares them to the expected savings of an electricity retailer. Our analysis is based on a typical German electricity retailer to determine the optimal read-out frequency of smart meters. For our set of parameters, a positive information value of smart meter read-outs is achieved within an interval of 21 to 57 min regarding variable costs. Electricity retailers can achieve a profitable setting by restricting smart meter roll-out to large customers.