Evaluating the impact of thermal energy storage on grid flexibility in district thermal source networks

The growing share of variable renewable electricity increases the need for flexible demand-side resources, particularly in the heating sector. Thermal Source Networks (TSNs), based on decentralised heat pump substations, offer untapped potential to support grid flexibility through coordinated operation and thermal energy storage (TES). However, most existing planning frameworks prioritise heat cost minimisation and overlook flexibility opportunities. This paper presents an analytical framework that models the operational behaviour of TSNs with distributed TES in response to real-time electricity market signals. The framework captures the dynamic interaction between heat demand, TES operation, and balancing market prices, while accounting for technical constraints such as storage efficiency, heat pump performance, and time-of-use tariffs. A rule-based control strategy modulates heat pump operation to minimise electricity costs and exploit market-based flexibility. The framework is applied to a representative district in Dublin, Ireland. Results show that TES integration enables load shifting and reduces operational CO₂ emissions by 22% compared to a baseline without storage. Participation in the balancing market generated €112,350 in flexibility revenue, covering 67.8% of the €165,753 electricity cost. Although current market conditions do not support full cost recovery, the study demonstrates the value of TES-enabled flexibility and provides a foundation for future optimisation and multi-market participation.