Development of a Joint Penalty Signal for Building Energy Flexibility in Operation with Power Grids: Analysis and Case Study

Abstract

Electricity generation from renewable energy reduces greenhouse gas emissions and, in the long term, the cost of electricity in power grids. However, there is currently no strong positive correlation between greenhouse gas intensity and electricity spot prices in Germany, despite increasing renewable energy penetration. Therefore, energy flexibility programs that rely on demand response may not be fully effective in reducing carbon emissions unless the energy market aligns consistently with carbon emission factors. To address this issue, we propose a model for joint signals consisting of power grid climate gas intensity and price signals that can achieve both environmental and economic benefits for building energy flexibility applications. Next, to assess the maximum possible flexibility hours from the grid side, we explore penalty signal threshold limits with daily and biweekly aggregation. Using a case study, we analyze energy flexibility with joint signals to explore their effect on greenhouse gas emissions and building operation cost. Our results suggest that joint signals can be more effective than a single type of signal in promoting energy flexibility.