Realizing the flexibility potential of heat pumps on the intraday market as data-driven business model

Recently, as a reaction to the energy crisis fueled by Russia's aggression against Ukraine, the EU launched the REPowerEU plan in 2022 to use more renewable energy, reduce energy consumption and diversify the energy supply (European Commission 2024a). One key focus area for decarbonization and energy saving is the private heating sector. Heat pumps take a central role in the heating system's flexibilization and decarbonization. In essence, the aim of this study is to assess heat pump´s flexibility potential, specifically concentrating on the intraday market by comparing it against other pricing mechanisms and examining different setups across various household heat profiles. To determine optimal load shifting schedule on intraday market, the study employs Mixed Integer Linear Program (MILP) optimization model. Model generates potential yields on intraday market, as well as for dynamic day-ahead and flat heat pump tariff, for data available for years 2022 and 2023. By comparing revenue streams, this study points to the flat heat pump tariff as most attractive pricing mechanism in terms of cost reduction. After further consideration, where financial incentives granted to flat heat pump tariff were isolated, the study settles on intraday market as best solution for private households offering flexibility with heat pumps. Positive outcome for intraday market can be attributed to the market´s high volatility, especially effective among households with high energy demand. To conclude, the research fills a gap in previous studies by providing insights into heat pumps offering their capacities on intraday market in comparison to other pricing mechanisms and proves intraday market´s high suitability due to its the high volatility.