Demand flexibility and electrification of transportation sector in energy transition

The growth of electric vehicles will inevitably increase electricity demand and its peaks. The power grid can become overloaded and unstable without appropriate energy policies and management technologies. Demand flexibility can allow better integration of renewables by aligning energy production and consumption while promoting the growth of electric vehicles by shifting the portion of electricity use. Enabled by the Hybrid Energy System Optimization (HESO) model, we present a novel framework for demand flexibility that allows the simultaneous optimization of hourly energy demand and supply, promoting better energy system integration with renewables. We provide mathematical formulations to represent demand flexibility in the HESO model. A case study is included to showcase simulation results based on different degrees of flexibility, investigating the cost-benefit of demand flexibility and the impacts of electrification on the transportation sector in Ontario, Canada, with a focus on road passenger and freight vehicles. By accounting for hourly variability, availability, and technological constraints, our findings demonstrate that demand flexibility can reduce the capacity of natural gas power plants, typically required for peaking, and increase the share of nuclear energy in the capacity mix, resulting in a 6% reduction in the levelized cost of electricity and a 38% decrease in emissions.