Summer heats up DSM prospects

Solar, wind deliver contrasting peak performances
Monday, June 24, 2013
By Barbara Carss

Recurring requirements to off-load excess electricity supply at ratepayers’ expense might appear to diminish the urgency of Ontario’s conservation and demand management (CDM) targets and programs. Surplus baseload generation – when demand drops below the output from nuclear, large hydroelectric and various renewable sources of generation now starting to come onto the grid – is projected to pose a consistent dilemma for the next two to five years.

Dramatic reductions in industrial demand and a boost in supply have eased much of the pressure that threatened the reliability of Ontario’s electricity system less than a decade ago. Nearly six years have elapsed since the Independent Electricity System Operator (IESO) appealed to consumers to reduce electricity use to stave off brownouts and blackouts. The IESO’s 18-month outlook projects a 0.4 per cent drop in province-wide energy demand for 2013, as new generating capacity more than offsets population and economic growth.

Nevertheless, forecasters expect peak demand will continue to factor into costs, occasionally stress the system and create spinoff environmental repercussions.

As the term suggests, peak demand exceeds Ontario’s baseload power output and presses other kinds of generation into service, which are generally both costlier and dirtier. This mostly takes the form of gas-fired generation within the province but can also include coal-fired power via imports. The highest cost generator sets the market price, causing it to spike upward as demand climbs and system operators are forced to acquire increasingly expensive options.

For commercial and multi-residential consumers, electricity price structure and lucrative incentive programs underpin the business rationale for load shifting, operational adjustments and tenant education efforts, regardless of the practical supply conditions.

“Peak demand, historically, wasn’t such a big part of the bill, and the metrics we have been using for years have always been geared to energy use, but for local distribution companies, the generator and the Ontario Power Authority (OPA), peak demand is what matters,” says Doug Webber, national green building practice leader with engineering consulting firm, Halsall Associates. “The CDM program value for the OPA really comes from peak demand.”

To that end, measures like thermal storage (which shifts cooling load at least partly to off-peak times) and daylighting (which eliminates lighting requirements entirely on sunny summer afternoons) offer a good payback. On the generation side of the equation, solar power is almost invariably in sync with summer peaks, barring occasional cloud formations.

“I really would like to see a lot more solar in rooftop commercial and industrial,” says Mike McGee, managing director of energy consulting firm, Energy Profiles Ltd. “It has what’s known as a good coincidence as opposed to wind, which has a bad coincidence; that is, a predisposition to blow at night when we don’t need the power.”

The IESO has factored solar power into its projections for reduced summer peaks. This will predominantly be in the form of embedded generation, which is consumed by the generator or a limited number of users within the generator’s distribution network.

A smaller 180 Megawatt portion will be connected to the grid and subject to new rules that come into effect this fall giving the IESO authority to instruct wind and solar generators to cut or halt production – a practice known as dispatching. That step is largely in preparation for the pending connection of about 1,550 Megawatts of potential wind power.

Surplus baseload generation is a costly excess, forcing the IESO to pay system operators outside Ontario to take power that is neither consumed in the province nor committed for export – costs that then are cycled back into Ontario’s electricity price. Dispatching gives the IESO a tool to somewhat control it. Likewise, generators can spill water at hydroelectric facilities or adjust nuclear output to some degree, although that is more difficult and costly since reactors are not easily manipulated.

The somewhat unforeseen collapse of industrial demand due to the economic downturn is a contributing factor but surplus baseload generation might also be seen as one of the variables of any infrastructure planning exercise and the imprecise art of timing service delivery to growth. From that perspective, interim overcapacity is not unique.

In the future, surplus baseload generation could be an enviable asset with the emergence of energy storage and electric vehicles. Meanwhile, renewable energy supporters argue that it should not be blamed for the current situation simply because it is the most recently added element of the baseload.

“They say wind is the problem because you can’t tell it when to blow but nuclear you can’t shut off. So which is worse?” asks McGee.

Barbara Carss is editor-in-chief of Building Strategies & Sustainability and Canadian Property Management magazines.

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