Investigation of the Role of an Aggregator Operating in the European Spot and Balancing Markets; the Case of an Island

Over the last few years, the increased electricity demand coupled with high penetration of intermittent Renewable Energy Sources (RES) and the advent of smart grid technologies have enhanced the role of demand side management in the efficient operation of the electricity network. The potential participation of end-users in the electricity markets has also highlighted the value of demand response (DR) in the power system through new market entities, called DR Aggregators. The DR Aggregators undertake the representation of a sum of domestic users, acting as third party intermediaries. This paper examines the current participation schemes of the DR Aggregators in European spot and balancing markets, following the concept of the Target Model. Furthermore, the case of a non-interconnected distribution grid, like the one encountered in the island of Cyprus, is examined. Opportunities and challenges of introducing the role of the DR Aggregator are explored, while the results are validated by demonstrating the DR Aggregator role in the case of the University of Cyprus (UCY) campus, acting as a microgrid.