The National Renewable Energy Lab has a great paper titled Flexibility in 21st Century Power Systems. The paper addresses three grid requirements to accommodate increasing numbers of variable generation resources like wind and solar energy.
- The first among those requirements is flexible generation. We need power plants that can run efficiently with a very low output level and ramp rapidly from those deep turn-down rates.
- We also need flexible transmission to carry power without bottlenecks and facilitate access to a broad range of balancing resources. That’s requirement number two.
- And, finally, the NREL authors say requirement number three is flexible demand-side resources. Those resources include storage, responsive distributed generation and loads engaged in demand response programs that can support the grid by responding to market signals or direct load control.
Amen to requirement number three.
Of the three grid requirements mentioned in that paper - generation, transmission and demand-side controls - only the third item has a prayer of being implemented by the average utility or energy services provider within the next year or so. Building power plants or transmission lines can take years of planning, regulatory wrangling, community negotiations regarding locational siting and, finally, actually building the plants or lines.
Cost is a factor, too, and it’s coming at a bad time. The under-investment in North America’s electric-system infrastructure has prompted a number of organizations to sound the alarm, including the Rocky Mountain Institute and the Union of Concerned Scientists. Worse, the proliferation of distributed energy resources (DERs) brings utilities even more cost challenges, such as substation upgrades to accommodate variable generation, distribution-system upgrades to more accurately track grid health, and increasing administration costs for interconnection studies and processing.
According to an article in Forbes, written by Accenture executive Jean-Marc Ollagnier, utilities face as much as a 15 percent reduction in demand due to growing adoption of distributed generation. “Depending on how a number of critical factors play out over the next 10 years, utilities in North America could lose between $18 billion to $48 billion a year,” Ollagnier wrote. “In Europe, this could range between €39 billion and €61 billion.”
Given revenue losses and investment requirements, it makes good sense to use demand-side resources for the increased flexibility utilities need because of the growth in solar penetration. Demand-side resources are already built into the system - any connected generation or load has great potential to support grid reliability by leveraging modern distributed energy resource management systems (DERMS).
Note that this last statement doesn't refer to traditional demand response, which simply sheds loads. A DERMS platform can also leverage storage, electric vehicles and customer-sited generation, which means it can bring generation up as easily as it brings demand down, and that is crucial to the successful operation of a DER-laden distribution system. This capability will help power providers deliver the energy needed at the end of the day, when people go home to their solar-topped houses and flip on the electric stove and air conditioning right at the time of day when solar power is starting to dwindle.
The Symphony by Enbala DERMS platform monitors the state of the grid and the devices attached to the network every two seconds in order to continuously adjust demand - or distributed generation - to meet the grid's needs. System algorithms continuously balance customer constraints against grid conditions to decide which resources to use to deliver optimal dispatch based on the state of each connected device and the service requirements of the grid operator at any moment in time.
The potential of such technology is huge. On a cost basis, The Rocky Mountain Institute published a paper titled The Economics of Demand Flexibility last year. It noted that “Residential demand flexibility can avoid $9 billion per year of forecast U.S. grid investment costs - more than 10 percent of total national forecast needs - and avoid another $4 billion per year in annual energy production and ancillary services costs.” Meanwhile, a study by the U.S. Department of Energy’s Oakridge National Lab found as much as 703 MW of capacity from C&I users that could be available for flexibility in the Western Interconnect alone.
So, while NREL authors listed demand-side resources as the third item on the list of requirements for a flexible power system, it's definitely not #3 in order of priority or value. Given the relative ease of bringing demand-side resources into play in a given power system, this approach to flexibility may well be priority #1..
For more information on a related topic, take a look at Enbala's latest white paper on how the fast ramping capabilities of DERs can help utilities achieve and maintain energy balance.