The Value of Prosumers’ Flexibility under Different Electricity Market Conditions: Case Studies of Denmark and Croatia

To reduce greenhouse gas emissions, power system strategies have focused on large scale integration of renewable energy sources (RES) subsidizing initial installations for a fixed time period to ensure investment profitability. However, increasing number of wind and solar (PV) power plants, not responsible for scheduling deviations due to their intermittent production, resulted in growing need for power system flexibility. By rescinding incentives and subsidies and exposing RES to the market, they become responsible for accurate prediction of their production and become penalized for deviations from the announced forecasts.Moreover, the suppliers, or the aggregators, will play an important role in unlocking and encouraging the flexible end-consumers with installed local RES and demand response (DR). They need to create market products in a form of different dynamic pricing schemes which award responsiveness to price signals and penalize passive behavior.The paper focuses on the value of household flexibility through electricity cost reduction in low and high developed energy power markets. Results show that households equipped with PV and different types of DR programs in high-liquid market (as one in Denmark), exposed to the volatile market prices and responsible for their PV production and demand forecast, achieve lower electricity cost comparing to poorly developed retail market in Croatia where consumers are better off in a two-price tariff system.