Using Demand Response to Balance System Load with Excess Renewable Generation

In an article for Renewable Energy World, Navigant Research looks at the benefits of demand response for renewables integration

Innovative utilities are looking to demand response for a new application — renewables integration. In an article for Renewable Energy World, Brett Feldman, principal research analyst at Navigant Research, explains how this approach can help increase electric grid reliability and the additional benefits it can bring.

“Small amounts of intermittent renewable generation, like solar and wind power, have almost no measurable effect on overall system stability,” Feldman said, “Yet, anticipating the degree to which generation goes up and down rapidly — called ramp events — is critical to supporting grid stability in a cost-effective manner when penetration exceeds 10-15 percent. Maintaining the balance in supply and demand is an important way to increase the reliability of the electricity grid.”

Feldman said demand response for renewables integration (DRRI) solutions, which increase or decrease customer loads based on renewables output, can help to maintain this balance — and that these solutions are expected to experience increased adoption. In fact, Feldman said global DRRI revenue is projected to reach $132.1 million in 2017, and by 2026, global revenue is expected to reach a total of around $1.3 billion.

According to the article, several factors point to an increasing focus on DRRI:

  • Increased penetration of renewable energy: An increasing share of renewable energy resources in the energy supply mix affects many regions around the world due to policy, technology, and economic factors.
  • DR as an ancillary service: Ancillary services maintain the supply-demand balance within a short timeframe. The main value of these services is the technical capability to provide reliable, fast-responding resources for purposes like addressing intermittent renewables output.
  • Dynamic pricing: Time-varying rates represent a way to address the effects of intermittent renewables through indirect financial incentives to customers. Historically, time-of-use rates have included higher rates during mid-afternoon peak load periods and lower rates the rest of the day. However, such schedules may not address grid needs due to solar- and wind-generating characteristics and could be adjusted accordingly with DRRI solutions.

“[Demand response] will not be the only method to deal with renewables integration, but it will certainly play a significant role,” Feldman said.

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