If we really want to make renewable energy a critical component of the electricity generation mix I think we have to honestly face the fact that “instant-on” essentially unlimited power will no longer be the norm. I personally don’t think that is a bad thing, but it is something that deserves thoughtful consideration.
We can go a long way towards eliminating the variability of wind and solar by building out large “smart” grids which will use geographic “smoothing” based upon the fact that it is usually windy and/or sunny somewhere. We must also develop and deploy practical energy storage solutions. And we can implement more Concentrated Solar Power (CSP) facilities like the Solana plant in Arizona which will come on-line in the next 18 months. That facility can provide reliable base-load power for extended periods including well past sunset. The Gemasolar CSP plant in Spain generates electricity 7×24x365.
But in the end, having done everything we can to reduce variability in the supply of electricity from renewables we also have to change our usage patterns. As many observers have pointed out, the real problem with electricity generation comes only for a few hours per day for a few weeks a year; during the coldest winter days and hottest summer days. If we could “clip” this peak demand there would be a far better chance of meeting our electricity requirements using renewables. That is what “Responsive Demand” is all about.
In a typical scenario a residential or commercial consumer volunteers to allow a utility to raise the thermstat on a hot day or lower it on a cold day in response to peak demand conditions. In return the consumer usually gets their electricity at a discount. So the trade-off is relatively mild discomfort for predefined savings on the utility bill.
In theory this is a great concept and utilities all over North America have been busily installing smart meters and remote control technology to enable “Time-of-Use” (TOU) pricing and Responsive Demand.
The problem is, in most cases it hasn’t worked very well.
In 2002 the Long Island Power Authority spent $33 million on the EDGE program which involved installation of utility controllable thermostats in 36,000 residential consumer premises. The program was used rarely until 2009 and since that time it has not been used at all. During an extended heat wave in 2011 LIPA defended its non-use of the program by stating that there was no physical shortage of electricity. In other words, they chose to pay very high prices for additional power (costs which all of their ratepayers would actually absorb in the long run) rather than inconvenience consumers that had volunteered to be inconvenienced (for a price).
A comprehensive study done for the The National Association of Regulatory Utility Commissioners highlights some of the issues related to “dynamic pricing”. People find it difficult to change usage habits enough to make a difference. Suppers have to be cooked at “suppertime”, people shower and dry their hair mostly in the morning, air conditioners and electric heaters respond to the weather.
That is not to say that time-shifting as much electricity usage to off-peak times isn’t valuable or useful. It is. The question is, how much usage can realistically be time-shifted? And can the potential long-term savings for a utility (principally by not having to increase generation capacity) justify the $1,000-$2,000 or more per ratepayer that it costs to implement these systems.
Education is key. It is clearly not enough to possibly save $20-$50 month on an electricity bill. With rates rising for other reasons and the electrical appliances in a home changing on a regular basis as we replace old appliances with new I think it would actually be extremely difficult to really see a reduction in costs that could be definitively attributed to time-shifting usage.
But doing power-hungry tasks in off-peak times is the right thing to do. We all know that. And we could all probably live with a few degrees shift to higher temperatures in the summer and cooler temperatures in the winter.
Oklahoma Gas & Electric’s Smarthours is perhaps setting Demand Response on a more positive track. Supported by a positive Vision Statement and a focused consumer education program the utility was able to clip 72 MW (1%) from a total generating capacity of about 7 GW in the initial pilot project. Most of this reduction was at peak load times which would have required additional power purchases and ultimately would have influenced plans for new capacity additions. OGE hopes to reduce peak load by 210 MW using this program in 2014.
In order to achieve a sustainable energy future we will need every trick and tool we can get our hands on. Demand Response is an important one.