Through a soon-to-be-launched demand response (DR) pilot program, Ontario’s Independent Electricity System Operator (IESO) will assess the potential for reducing energy loads during periods of peak demand. Five proponents have been chosen to test various strategies, including efforts to recruit commercial electricity customers via DR aggregators. Douglas McAlpine, head of demand response, Canada, with Renewable Energy Systems (RES) outlines some of the parameters of participation, which will be enabled with smart grid technology.
What’s the premise of aggregation and what are the typical energy loads the DR aggregator will work with?
Our pilot project commitment is for nine separate projects, each with the capacity to deliver 1 megawatt (MW) of demand response. A typical food retail site has approximately 30 to 50 kilowatts (kW) of demand response capacity across the store, which, individually, has limited value to the IESO. However, coordinating the response across 25 sites builds up to 1 MW of demand response capacity.
Facilities with refrigeration units, HVAC systems, water treatment pumps and chemical and mechanical processes are all good candidates. We look for an operation, process or service that has flexibility in terms of the time when it is used, or the intensity with which it is used. A process that offers spare capacity at constant levels is valuable, but our process works with all types of capacity throughout the year.
For example, lighting is normally on only for the duration of the working day and can only be controlled during that time. A refrigerator typically has spare capacity through the day, and throughout the year, with relatively small seasonal variations. In contrast, a heater will not have spare capacity during the summer months when it is turned off. However, during the winter, that heater has good capacity as temperatures can be managed for a short period of time without a discernible difference in occupier comfort.
How is smart grid technology applied?
Demand response has been around for some time, but a lot of it has been clunky. In the past, it has typically involved large energy consumers who can switch off a big piece of equipment and are then compensated for the disruption that occurs. Smart grid technology can capture a wider range of small loads across multiple sites with minimal disruption, which is why the IESO has chosen to pilot it.
The system works silently in the background, changing the traditional approach in which participants receive advance warning to shed electricity load. Instead, using the example of refrigeration units, the system communicates directly with the fridge unit or control system. Working from temperature set points between 2° and 5°C, prior to a DR event, it could tell the fridge to go to the lowest 2°C set point and then turn off until the temperature starts to come close to the upper set point of 5°C, at which point it comes back on automatically.
This range of set points is defined by the equipment user and cannot be breached by instructions to reduce load. As soon as the end points of the range are approached, the equipment control system overrides any external instruction and returns the equipment to normal operating conditions.
Where is the value for DR participants?
The IESO will compensate the DR aggregator based on a formula of annual megawatts of demand response capacity. The aggregator operates under a revenue sharing agreement with participants, which depends on the availability of their capacity.
Value is created from equipment that up until now has only been an expense to the owners. Additional potential benefits exist, including the reduction of peak energy charges and Global Adjustment fees or energy savings.
Because it is a portfolio of demand response, there will be less pressure on individual participants to meet the curtailment requirements. The automated systems will complete most of the work so, if a certain load is unavailable, the system will aim wherever possible to fill that gap with another participant in the program.
Looking at examples of other demand response markets in the United States and Europe, a variety of assets like municipal water pumping stations, office complexes and supermarket chains have participated. A demand response capacity of 1 MW can be achieved by a large office building by controlling the HVAC systems or through 25 supermarkets.
Renewable Energy Systems (RES) is involved in development, engineering and construction of a range of low-carbon energy resources and services including wind, solar, transmission, energy storage and demand management projects. RES is currently seeking partners to participate in the demand response pilot program in Ontario.