Demand Response as a Competitiveness Lever for Zero-Emission Industrial Electrification

Abstract

Deep electrification of energy-intensive industry increases exposure to volatile electricity prices and, in the Dutch context, disproportionately high grid tariffs. This paper quantifies the techno-economic value of multi-purpose demand response (DR) for a theoretical 500 MW zero-emission oil refinery in Pernis, the Netherlands, modeled as a coupled electricity-hydrogen multi-energy system. A linear programming model cooptimizes hourly dispatch and capacity sizing of battery storage, hydrogen storage, and electrolyzers, minimizing opportunity, operational, and annualized investment costs over a full simulation year. Results show that DR reduces total annual costs by 24 - 27% relative to the no-flexibility baseline. Grid connection capacity (GCC) emerges as the dominant cost lever: reducing GCC from 500 MW to 204 MW yields an additional instant saving of 73 M€/yr, making optimized DR the most cost-effective zero-emission design.