Why it pays to reduce energy demand at peak times

There are two ways to manage peaks in electricity demand. You can increase supply, or you can reduce demand. In traditional grid management, the former has always won out. New supply is rapidly brought online to meet people’s needs, with regular peaks first thing in the morning and then in the early evening as people get home and cook their dinner. One of the main arguments for keeping older power stations operational is to fire them up at these peak times, even though it produces a lot more CO2 to ramp up production at short notice than to run a consistent base load.

A high percentage of renewable energy also creates variability throughout the day, as sunshine and wind levels rise or fall. Solar power is particularly unhelpful, delivering the most capacity at the time of lowest energy demand. The grid has to balance this intermittent output, predicting and calling in electricity supply as required.

With new technologies available, it’s now much easier to take the alternative approach to peak times: reducing demand. Smart appliances can take requests from the grid and reduce power when needed – a fridge might delay its cooling cycle, a laptop could run on battery power. Domestic batteries or electric cars can delay charging, or in future run backwards and discharge into the grid. And if incentivised, people can choose to use less at times of peak demand.

is a company delivering energy reductions at the industry level. Rather than generating electricity, they sell ‘negawatts’ to grid operators. They do it by signing up partners in energy intensive industries such as steel, cement or chemicals, and then paying them to pause production during peak times. Instead of driving up electricity supply to meet the peak, it brings the peak down, reducing CO2 emissions and making better use of renewable energy. In 2017 REstore had 1,500 MW in its flexible power management portfolio. Companies such as ArcelorMittal or Total are involved, and being paid to cut their energy use on demand.

does something similar at the individual level in California. It takes readings from the grid on how much electricity is being produced by renewable energy. If it’s a high percentage, it notifies users through an app. When clean production falls and the supply is ‘dirty’, users are encouraged to cut back. The grid operator pays for the savings, which are passed on to the user. Households with solar panels know the value of running the washing machine when the sun is shining, something I’ve done myself this week. Ohm Connect incentivises everyone to adopt this sort of tactical energy use, regardless of onsite generation, and has paid out $4.8 million so far to users.

This is possible in California because people have smart meters. When Ohm Connect requests a power down, it can see who has responded. Britain’s smart meter roll-out has been beset by all kinds of , but the National Grid could probably do something similar. The offer of getting paid for energy savings might encourage people to be more positive about smart meters too, as there’s a lot of and even paranoia about them in some quarters.

is running a trial in the Midlands where households are paid to feed into the grid from domestic storage during peak times, so there are experiments in demand management already. We can expect to see more of it in the years to come, and hopefully it will be something that many of us can benefit from as well.

One comment

  1. It would be helpful if you could reference where you obtain your graphs from. In this case, there’s no labelled y-axis which makes it difficult to make much sense of the graph. One criticism I’ve received from a follower is that he thinks ‘the solar energy potential and usage curves are on different scales’. It is difficult to know if that is right or wrong!

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