Demand Response and its Potential Value

The electrical industry can overcome pressing issues with robust demand response solutions.
Published: Thu 27 Feb 2014

The power industry faces a number of new challenges-non dispatchable generation, intermittency, decentralized energy resources and significant data flow increases. This can be overcome by demand response solutions, says Thierry D’Alancé, Executive Vice President International Development, Schneider Electric – EnergyPool, in his presentation, What is the Potential Value Creation of Demand Response for the Electrical System?, at European Utility Week 2013.

As an aggregator, Energy Pool has a close relationship with the transmission system operator and the utilities. Through the effective use of demand response solutions, Energy Pool provides the transmission system operators, distribution system operators and utilities with services to ensure safety, capacity, and balancing and renewables integration. The firm helps to aggregate, secure, operate and optimize power capacity. It assists with emergency and unplanned shutdowns, and the modulation of consumption.

Mr D’Alancé says that demand response provides great value with regards to the following transmission and distribution system operator goals-

For the transmission system operator, demand response can help to:

  • Guarantee a high level of service and security of supply

  • Deliver optimum management of electricity flows across the network

  • Guarantee non-discriminatory access to the network

For the distribution system operator, demand response can help to:

  • Guarantee service continuity and quality

  • Guarantee non-discriminatory access to the network

Demand response can help both system operators by providing competitive and effective ancillary services, mitigate intermittency, and provide local solutions for local issues.

The wide range of demand response products support effective and reliable ancillary services across the board:

  • On a transmission system operator level, Energy Pool was able to assist with security using demand response to curtail power.

  • Demand response provides capacity which serves to benefit both the utility and the consumer. Energy Pool assisted during the 2012 cold wave in France when all time peak consumption hit 102 GW. Through demand response, an additional 250 MW extra generation capacity was provided.

  • Better integration of renewable energy. The concept here is to absorb renewable energy sources variability through the use of demand response capacities. The aim is to increase renewable energy sources variability through complementary demand response capacity.

  • On the DNO level, demand response can improve the management of local congestions, optimize network investments, improve the integration of renewable energy, and mitigate the intermittency of local renewable energy with local demand response resources

Demand response is competitive and is proving to be cheaper than costly oil and gas imports, explains Mr D’Alancé. It is effective as it can involve significant volumes of power and solutions are quick to implement. In addition, it is good for the environment as it reduces carbon footprints.

Demand response participants will benefit as it creates a new stream of revenue and it establishes a competitive advantage for participants.

Mr D’Alancé concludes by saying that demand response is well positioned to address the growing challenges that the industry is faced with. However, it is critical that demand response is given the right support in order to bring more value to the power system.

Strong political and regulatory backing of demand response, simplification of the technical ecosystem and growing experience amongst industry demand response leaders such as Energy Pool will go a long way to develop demand response.