What is Electricity Demand Response and Storage?

Did you know that residential and commercial solar panels have the most energy efficiency when they’re installed on a south-facing roof, with a 15-to-40-degree slope?

With more and more people installing solar panels, as well as using other methods for energy sustainability and energy independence, power grid companies have been forced to adapt, building their own new innovations. Among those innovations are two new systems, demand response, and energy storage.

Demand response and energy storage are important tools that enhance a power system’s flexibility. They accomplish this by aligning variable renewable energy supply with their customers’ power demand patterns.

What this means is that, by utilizing energy storage, power companies can deliver more electricity to consumers at the specific times of the day or week when they actually need it, thus shifting the timing of the supply. And with demand response, they can shift the timing of the demand by incentivizing consumers to use more energy at specific periods.

Some examples of existing storage technologies are batteries, pumped-hydro storage, compressed air energy storage, and flywheels. All of these are ways we currently have to store electricity in reservation for times when it’s most needed.

Demand response relies more on the cooperation of the consumer than it does on the power company itself. Power companies with demand response will offer voluntary and incentivized programs consumers may participate in by using less energy at peak times of the day or week. This will even out the load for energy suppliers, and provide valuable savings for people who want to participate in the programs.

The role fulfilled by demand response and energy storage has become increasingly critical and cost-effective, especially at high penetrations of solar and wind power generation. At this time, studies have discovered that the power grid can support roughly 30% of the current annual electricity demand brought about by variable generation. This is done largely with flexibility options, which increase instantaneous penetration of variable renewable energy.

With penetrations past 30%, incorporating variable renewable energy into the power grid will become more challenging, because of the limited alignment of solar and wind supply and energy demand—not to mention the inflexibility of standard generators, which can be used to balance the overall system.

Unless the power grid becomes sufficiently flexible in this manner, it will not be able to accommodate both consumer demand and energy supply from wind and solar driven sources. As a result, thermal plants will not be able to reduce their output, and solar and wind power producers will have to be curtailed.

As this curtailment continues, variable renewable energy will offset less fossil fuel generation, thus decreasing its overall value. Thankfully, through demand response and energy storage at the power supplier level, curtailment of wind and solar production will be reduced, and higher penetrations of variable renewable energy will be facilitated on the grid.

Operators of power systems will be able to weigh the benefits offered by demand response and energy storage against their implementation costs. Unfortunately, most storage technologies available are very costly and rather inefficient — in fact, only 70-85% of the energy that has been stored is actually useable afterward.

Fortunately, unlike storage technologies, demand response programs won’t incur any such problem involving efficiency. They do, however, involve considerable implementation costs—for example, for persuading consumers to participate, and then managing their power demand.

In most cases, demand response is the most effective when it is combined with an advanced metering infrastructure, or AMI. This infrastructure can offer more detailed load information, as well as provide continuous communications remotely.

Because of challenges involved in trying to quantify the point where demand response and energy storage become least-cost flexibility options, determining the ideal role of these systems inside of power systems involving high variable renewable energy will require consistent analysis, new techniques of investigation, and further improved data.