This post is one of the articles published by a small cohort within our UK team including Dr. Mahmoud Elkazaz, James Wilson, Andrew Eviston, and Dereck Dombo. This group meets regularly to collaborate on topical issues of the day, shares the researching and writing effort across the team, and presents internally before publishing.
Traditionally an electric utility (transmission or distribution) system operator’s role is to balance electricity supply and demand to maintain system frequency and overall stability. Nowadays with climate change challenges and more renewable generation (wind, solar and other new technologies) being interconnected, the role of the system operator is becoming more complex due to the variable, and less predictable nature of some clean energy sources. One solution to alleviate intermittent generation issues is demand side response (DSR).
What is DSR?
DSR is simply using electricity when it’s available and stopping using it when it’s not. Utilities can use the adjustment of demand of any type – from large industrials to businesses, to the household consumer – to introduce flexibility to keep the grid stable. It is often preferable to alter the demand where possible rather than switch on more large-scale generation. Presently, both private smaller generation, as well as battery energy storage systems (BESS) can also play a role in DSR management.
A good example of DSR is refrigeration. It is possible to turn off many refrigeration units for a few hours without a reduction in temperature. Knowing this, a warehouse that stores fresh produce may be able to lower their demand if needed by the system operator without any ill effects. The warehouse owner can then earn revenue from this system balancing method.
Many industries also produce power for their own needs through cogeneration or other methods. Demand response could also involve the ramping-up of this generation during periods of high demand to balance the network. However, care must be taken to ensure that the needs of the industry that owns the generation sources are met first, before satisfying the grid requirements.
Finally, there are many privately owned energy storage systems (ESS) that can be used to balance the grid that can provide DSR. An example is a home with a home battery storage system that stores clean energy generated by a home solar system. It can provide backup energy for the homeowner if necessary, and it can also be enrolled in a DSR program with the local utility (if offered) who can use the energy stored in the home battery if necessary in times of high demand.
Why is DSR more important than ever?
Generation and storage systems are becoming both more distributed and more intermittent due to the increased penetration of renewable energy sources. Because of this, demand response is more necessary than ever to keep the system stable and the lights on. DSR is a practical tool to help achieve a net-zero energy supply.
In the UK, 40% of electricity is generated from gas-fired power stations while gas heats the vast majority of homes. The head of Britain’s electricity and gas systems operator has recently warned of a possible blackout scenario this winter if there is not enough gas to meet demand, especially if there is a period of cold weather. To avoid blackouts, a DSR service – National Grid calls it a Demand Flexibility Service – has been launched to reward consumers for not using power during peak times with the expectation of delivering power savings to help balance the network and prevent any electricity interruptions.
Demand response aggregators
Bigger load and generation sources may have direct agreements with the system operator for demand response. However, some companies operate as ‘demand response aggregators.’ These companies compile many different individually owned load and generation assets into a single virtual power plant (VPP). Flexitricity is one such aggregator and is the oldest in the UK. They form agreements with the asset owners and work on a profit-sharing model, so no upfront investment by the asset owner is needed except those needed to allow the asset to form part of the VPP. Once the assets are integrated into the system, the VPP is operated by a single control room and can have a large effect in balancing the grid, subject to the requirements of the asset owners first.
DSR provided by BESS
At very high penetrations of wind and solar, the role that can be played by DSR and BESS is crucial and yet cost-effective. BESS has the capability to provide a dispatchable source of demand response power reserves. A shifting demand response program may overcome some of the BESS limitations to improve the flexibility of the grid. For example, during the peak price period, the network operator could shift a portion of the load to low price periods as opposed to discharging BESS. In addition, it has also been shown that demand response and BESS in combination can contribute to spinning reserve services thereby reducing the cost of spinning reserve service of generators.
How PSC can help with DSR
PSC has the expertise to help system operators (such as TSOs and DNOs), demand response aggregators, and asset owners in all aspects of distributed energy systems and loads, as well as DSR.
Find out more about our DSR capabilities and contact us to talk about first steps.