At the start of the summer demand response season in North America, grid operators have already used Enbala's Concerto™ platform to dispatch about 100 events to keep the grid stable as heat waves settled upon the western half of North America. Our thoughts are with those in the extreme heat, and we know that describing rising temperatures — coupled with wildfires and severe weather — as "disruptive" is an understatement. However, high temperatures point to the need for distributed energy resource (DER) orchestration to keep the grid stable and to help keep utility customers as comfortable as possible.
Guest blogger Peter Asmus of Navigant Research writes about the virtual power plant market in Europe.
Europe, considered the birthplace of the virtual power plants (VPPs), is pushing the envelope on the concept. The continent is adapting platforms to provide new and more sophisticated capabilities to maximize the value of flexibility resources while opening doors to new value streams linked to creative ancillary service markets and real-time energy trading.
Historically, the European VPP market has centered on renewable energy integration. While this remains the case today, a shift is underway to learn from other evolving VPP markets in Canada, Australia, and Japan. The new focus includes integration of demand side resources as well as energy storage and EVs. Today, virtually anything that produces, consumes, or stores electricity (or energy) is a candidate for VPP inclusion.
Guest blogger Peter Asmus of Navigant Research writes about the evolution of the virtual power plant market in Australia.
Australian consumers boast one of the highest per capita consumption rates of electricity in the world (even greater than the U.S.). These consumption levels translate into flexible load resources ideal for aggregation and optimization into virtual power plants (VPPs).
What is a VPP? Think of it as a conglomeration of many distributed energy resources (DERs -- loads, but also generation, batteries and electric vehicles -- that can be combined into a pool whose sum of parts’ value is far larger than these DER assets offer individually. With sophisticated artificial intelligence software, these resources scattered across the grid can be combined “virtually” to provide the same services as a traditional 24/7 power plant -- but at much lower and environmental cost.
Energy systems are changing. As variable renewable energy generation replaces retiring fossil fuel-run power plants, we see a shift from our century-old mindset of centralized supply following demand, to a more distributed grid with distributed energy resources (DERs) playing an essential role in a sustainable energy future. In order for renewable energy resources and DERs to replace conventional power plants, they need to be able to act like power plants – virtually at least.
At technology and innovation’s finest hour, we are able to aggregate disparate, geographically dispersed DERs and orchestrate them in such a way that they are able to respond to the grid’s needs at the same speed and accuracy as a traditional power plant. That’s where the Virtual Power Plant (or VPP for short) comes in. Navigant Research defines a VPP as:
VPPs are critical for the transition to more sustainable energy systems – so where is the technology at? Where can we find VPPs? And what can we expect in the future?
The California Duck Curve reveals a potential costly issue for utilities and their customers. The annual peak load appears to be continuing to grow -- because it occurs after dark when there is no solar power being generated -- yet energy sales may be declining with the growth of distributed solar generation during the day. This results in the need to continue to expand the grid, but without the sales revenue to support the added capital expense, presenting a Catch-22 that utilities are struggling to overcome.
Opening the Distributed Energy Doors is a Win-Win
In November of last year, FERC issued a Notice of Proposed Rulemaking (NOPR) around electric storage resources. The goal was to better allow these distributed energy resources (DERs) to compete in the various wholesale markets. Per their November press release, FERC’s NOPR would require that RTOs/ISOs:
- Establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodate their participation in the organized wholesale electric markets
- Define distributed energy resource aggregators as a type of market participant that can participate in the organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation
Ham and eggs. Abbott and Costello. Batman and Robin. Hey, there are a lot of great duos in the world, and here’s another one: building management systems and automated demand response (DR) designed specifically for small- to medium-sized companies.
What makes this a great combo?
There’s a good reason that traditional demand response (DR) programs only ask C&I customers to curtail energy usage a few times each year. Traditional DR is painful. It’s a no-holds-barred, shut down that conveyor belt, stop production, turn off the air conditioner and send people home kind of deal. It is, by definition, disruptive. And, frankly, not every organization can afford to have its business endure even a few interruptions a year.
But, DR doesn’t need to be disruptive, and to get the most out of today’s demand management technology, we really need to think of curtailment events as a day-to-day method of grid support instead of troublesome headaches that must be painfully tolerated.
That’s what one East Coast utility is doing with the Symphony by EnbalaTM distributed energy resource management platform (DERMS). By aggregating small amounts of response from many different devices in one site, a promising pilot is showing that curtailment can be both effective and invisible to customers.
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.
According to FERC’s most recent "Demand Response and Advanced Metering Assessment," 74 percent of the potential peak reduction in retail demand-management programs comes from C&I customers. That means that the biggest, most valuable energy customers are also the most likely allies in a demand response initiative.