Recently, I did an interview with Lisa Cohn from Energy Efficiency Markets. In the interview, I explain demand response and it’s role in facilitating the integration of renewable energy:
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When I wrote “Is Demand Response Clean?”, many readers thought that I was not a supporter of demand response because I pointed out that it is not necessarily clean if customers shift load to off-peak hours or use a backup generator. In fact, I am a huge advocate of demand response, but I think the focus needs to shift to how demand response facilitates the integration of renewable energy. As I mention in my interview with Lisa Cohn, without more demand response, growth in renewable energy will be much riskier:
“The biggest impact of demand response is that it is going to facilitate more integration of renewables onto the grid… California wants to get to 33% renewables by 2020. That is going to introduce a lot more risk onto the system because these are intermittent sources of power. With more demand response on the system, it is going to enable the system operator to respond to changes in weather… There are substantial automated demand response resources that are coming online… We’re in the process of trying to prove that these resources can come online in less than 10-15 seconds… If the wind stops blowing, the utility can immediately shut off a bunch of air conditioning load to respond to that reduction in generation.”
When most people in the industry think about the risk posed by renewable energy, they overlook demand response and look towards batteries and other forms of energy storage as the logical solution. A recent podcast entitled “Energy Storage: Will We Find the Holy Grail?” by Stephen Lacey of Renewable Energy World provides an example of this tendency:
“We’d all like to see a world mostly powered by renewables; the sun, wind and water providing us the energy we need to keep society moving. It’s an appealing thought, but it is possible? To some extent, with the proper integration, these resources can make up a substantial part of our energy mix. But at some point, given the variability of these resources, we have to have storage. Without it, our efforts can only go so far.”
I could say (and have said) exactly the same thing about demand response. Given the variability of renewable resources, we have to have demand response. Without it, our efforts can only go so far.
In fact, demand response and energy storage are not that different. Consider this example of two air conditioners whose owners only want them to consume renewable energy (which will be popular in the near future). One air conditioner uses a battery as backup when renewable resources are temporarily unavailable. The second air conditioner is demand response enabled and runs relatively harder when renewable resources are available and shuts off when they are not.
When renewable resources are available, the first air conditioner runs normally while extra energy is being consumed by the battery, whereas the second air conditioner consumes extra energy because it is running harder. When renewable resources are temporarily unavailable, neither air conditioner consumes grid supplied power because the first is running on the battery and the second is off. To utilities and grid operators, there is no difference between the two approaches to responding to the availability of renewable resources.
Consumers with the demand response enabled air conditioner may experience a difference in comfort on a few unusual days, but considering that many of us prefer to consume renewable energy, it may be worth the small sacrifice. After all, it is a cheaper solution than having a battery as backup.
Is energy storage the holy grail or are we overlooking other options?
My understanding about the issues posed in the post as they relate to the Australian National Electricity Market is that:
- demand response is currently used to provide frequency control ancillary services (through the 5-min dispatch) and network ancillary services
- while most demand response for frequency control ancillary services has been for largish loads, people are looking at having small loads being able to provide those services.
The market design of the NEM is such that the wholesale market seeks to meet forcast demand each 5 min at least cost (given network constraints) – it doesn’t seek to match demand to supply. It would be interesting to think about a market design in which supply was stochastic to some extent and that demand should be shed to match it if needed, as suggested by the post.
Here in the Mid-Atlantic, the local utilities are using carrots to entice users to cut back on demand at peak hours. PEPCO offers up to $160 per year while providing free automated equipment (Web-based) that cuts up to 7 hours of power to AC units when brown-outs are in play. They have two other plans, which include a free multi-hour Web-remotely programmable thermostat, that cuts back lesser amounts. We are a long way from having problems with intermittency from renewables, with less than 1% of our power from wind and almost nothing from other alternatives.
The holy grail for renewables is the cup which provides nectar as the solution for all three thirsts of our future needs: power, food, and water, while producing no carbon dioxide. That solution is found in the use of ammonia as a hydrogen carrier, which is easily manufactured with solid state ammonia synthesis from air, water, and off-peak thermal and electrical power generated by any source. Ammonia is used as fertilizer, pipelined to the largest agricultural producers in the Midwest today. It is a superb fuel for transportation, with three times the average volumetric energy density of highly compressed pure hydrogen. It saves water when used in solar thermal installations since it can be manufactured with the waste heat from the plant, vastly improving the total conversion efficiency. All the energy collected can be used with much less cooling water. The product, when sold for less than $2.50 per gallon of gasoline equivalent, provides superior economics for the larger facilities built for renewable power. Wind systems can do that as soon as they become larger sources of grid power.
DR is not only for the home. Have a look at this National Geographic Story.
There are a lot of industrial processes with some build-in storage. Of course these stores have a value, so if you want use this storage for other purposes, it comes at a price.
DR from the view of utilities is a Trojan horse to allow them to impose time of day pricing for energy. Connecticut is the first state to move in this direction. DR attacks the problem of grid power distribution analysis but not necessarily consumer energy usage metrics. For that you need HOM technology in a building that monitors and reports energy use in some form of granular data. However, even looking at Google’s open source PowerMeter, it fails on a human level: people do not want to be bothered with constant reminders to change their habits. The successful model has to be set and forget with some form of intelligence to manage energy usage through smart sensors and controller in the home that are not dependent on smart meters. A couple of vendors are attacking this area: Gridpoint, Trilliant and Gridplex
All the Smart Meter vendors espouse DR and secondarily HOM, but in the end, consumers of energy will be held hostage by rate tariff plans by utilities to keep the IRR to shareholders from being diluted.
As for the issue of clean energy, the other barrier is feed in tariffs, something utilities are loathe to allow. One of their claims is that disruptive, unpredictable renewable energy sourced from point of use (distributed energy provisioning), will cause havoc in existing distribution systems and transformers. A very well documented study in the California Sacramento utilities district (SMUD Anatolia project) shows that even at peak periods of solar flowing back to the grid, the overall surplus is less then 4 percent. This in an area of the State with over 6 hours of solar and average summer temps over 100F.
I would also caution the concept of storage batteries as a way of load management. The cost factor with these systems is prohibitive and the payback period is uneconomical. I don’t see battery technology improving as fast as fuel cell energy technology which within the next 3 years could start to eat into solar as a RE source.
Finally, new classes of magnetic materials show early promise (within 5 years) where energy for electricity can be produced from a self starting solid state device in the 2-10KWh range. This approach solves the key problem of wind and solar (power is dependent on environment and weather). Magnetics will work 24/7 allowing an energy user to consider their grid energy connection as a backup, not a primary source.
For some examples check out:
BlackLight Power
Orbo from Steorn
Chava Energy
to understand where the future of RE is coming from.
Once that happens, utilities will be marginalized for 2/3 of energy usage. And the price to generate KWh at OEM prices will be below 1 cent/KWh. You will see the first implementations replacing gasoline or diesel powered electric backup generators.
I was recently the chair of the NERC Integration of Variable Generation Task Force and we recognized the value/role that demand side resources can play in the integration of variable generation resources (i.e. wind and solar).
As described in the NERC Special Report Accommodating High Levels of Variable Generation (http://www.nerc.com/files/IVGTF_Report_041609.pdf) “…additional flexible resources, such as demand response, plug-in hybrid electric vehicles, and storage capacity, e.g. compressed air energy storage (CAES), may help to balance the steep ramps associated with variable generation. These resources may allow grid operators to quickly respond to changes in variable generation output…”.
To fully integrate these resources into day-day operations is going to take some effort but there are some very attractive aspects as:
- the resources/programs are easy to commission/can be brought on-line in a matter of months (vs. years)
- the resources require minimal infrastructure and permitting
- the resources can provide a near instantaneous response
- the use of demand side resources has been proven (i.e. ERCOT reliability event avoided)
- customers (large and small) can choose to participate as they see fit
- demand side programs are supported by FERC, ISO/RTO’s, state/provincial regulators
Cheers,
Warren
Good afternoon, all,
Demand response is a new exploration for me and I am working hard to catch up despite the rather steep learning curve.
It seems, though, that while demand response might help us reach a goal of conservation to which I believe we all ought to be working, there is a significant renewable energy source that could readily make up the difference while producing other revenue streams for their owners.
Fortunately, the technologies do not require development. In fact, the three most important to the energy and product manufacture process have been in commercial scale operation around the world for 80 – 140 years. While not carbon negative, carbon neutral is easily attainable.
There is a process comprising these and a number of other existing technologies capable of improving yield and providing products and energy in a carbon negative manner.
Coupled with demand response I would think that this combination might prove to be in a position to bring environmental benefit from both the supply and demand sides simultaneously.
I look forward to reading more of the comments here and hope to learn enough to participate in a meaningful way as time goes on.
Regards,
Martin
DR has a long way to roll out both in terms of logistical implementation (hardware) and for programs to be established. There are many companies with simple thermostatic solutions but a comprehensive solution that combines HAN with intelligent multizone HVAC controls will be a key player to both enable automated DR and at the same time improve comfort. We have that system going to trials now.
On the program side, utilities are just getting started from what I can see. SCE will be rolling out a program next year that pays customers for DR on KWHr basis. They will be paying $.75 for each manual KWHr and an additional $.50 for automated response. The carrot is always a better place to start than the stick.
I have thought of a system that I called “the house that sleeps at night”, where solar panels would power the house directly, with a minimal storage of electricity for things like lights. As the sun rises in the morning, loads would be switched on to maintain a constant voltage from the photovoltaic system. Some low priority loads could be used for regulation (ventilation, washing machine, freezer up to an extent). It may seem extreme, but we would basically have to learn to adjust our activities to the time of day. At night, only freezer and refrigerator would run, with defrost off. All the intelligence would be in the house electrical panel, switching loads on and off depending on the photovoltaic system output.