How aggregated DERs are becoming the new demand response
Grid operators are designing new markets and mechanisms to get reliability and flexibility from aggregated distributed energy resources.
The value of electricity is never greater than when it is not available. Take California’s historic energy crisis in the early aughts.
Big power users had promised in the 1970s they would reduce energy usage or pay high prices if ever the state grid operator needed help meeting demand, but when the crisis hit in California in 2000-01, many refused to cooperate and conserve energy. The subsequent skyrocketing power bills caused political furor, the recall of Gov. Gray Davis (D) and the election of Gov. Arnold Schwarzenegger (R).
That series of events also led to real demand response programs across the United States, which the California Independent System Operator (CAISO) and other system operators could now depend upon. Instead of asking for help from “interruptible” electricity customers, they began offering big power users remuneration in return for load reductions.
But those demand response programs do not have the flexibility grid operators need today. Coping with today’s dynamic grid and rising levels of variable renewables takes more than just load reduction because demand response is no longer simply about meeting demand peaks, but also managing voltage and frequency fluctuations and handle shifting loads and over-generation.
As a result, demand response is turning into aggregated distributed energy resources, according to a recent report from GTM Research.
Traditional demand response is “heavily entrenched” in wholesale markets, according to the paper. But the increasing penetration of DERs and the capability of providers to deliver aggregated behind-the-meter fleets of them is allowing system operators to seize their value, eventually allowing the private sector and system operators to partner in bringing consumers into energy delivery.
But that valuation will not come quickly, the paper noted, as grid operators must learn to deal with diverse aggregations of resources such as rooftop solar, battery storage, EV batteries, hot water heaters, and home appliance loads.