Demand Response for Renewable Energy: A Smart Grid for the Future


Reverse demand response is meant to create balance with regards to system load & the supply & demand of energy – solar is important, but so is balance.  

A new product called reverse demand response has been proposed by the Arizona Public Service in September 2017. It is able to balance the system load when there is too much renewable power generation. In fact, the reverse demand response is the latest system designed to integrate (including solar) into the overall energy production and consumption mechanism.

While solar energy and wind power don’t have much effect on system stability (because they are generated in low quantities at the moment), the need to predict generation ramp events (when solar power generation goes up and down very fast) has been made clear. When solar energy makes up over 15% of the total energy being generated and consumed, these spikes in generation and consumption must be kept under control. Otherwise, the electrical grid stability is at risk.

To increase the reliability and stability of the grid, proper balance must be maintained between the supply of solar energy and the demand. The solution (demand response for renewables integration) is one of the best methods to achieve this important balance. The system decreases the customer loads according to how much solar energy is being produced at the time. Although there are several DR options available for both industrial and residential consumers, few grid operators use systems that can easily balance renewable energy such as solar power.

Benefits of Demand Response for Renewables Integration

Using demand response for renewables integration has two main benefits. First, they are perfect for maintaining the balance at the system level when dealing with solar or wind energy. These DRRIs are able to quickly respond to any kind of change that occurs on the bulk power system. These changes can be the result of large-scale solar power generation or the result of many small solar power generators on the electric grid. Grid operators and utility companies are always on the lookout for flexible resources, so this application of the DRRI on solar power generation and consumption sounds very appealing.

The second benefit is the fact that a DR system can balance solar power output and consumption at the facility level (or at the campus level, if dealing with universities). Consider this: a site generating solar energy needs to balance the load, too. One building has a couple of solar panels installed (or the parking lot is covered in solar panels). Other buildings are using the electricity coming from solar sources to meet their energy requirements. The balance between supply and demand must be maintained at all costs. When the solar panels are not producing energy, the DR system is able to manage the load and avoid any kind of peak demand.

There are several other reasons why DR is a good choice for solar power generation and consumption:

  • The DR system increases the penetration of solar energy. As long as solar energy can get an increased share of the energy supply mix, solar energy will be in demand. The demand for solar energy will cause an increase in supply, as is natural.
  • DR can be used as an ancillary service. The system is capable of maintaining the balance between supply and demand and can respond quickly to changes. DR can provide a fast solution to the intermittent solar energy output problem.
  • DR is an interesting solution for dynamic pricing purposes. Time-varying rates have been used by utilities providers and grid operators for years. And the effects of intermittent solar power generation can be put to good use by a DR system that offers some financial incentives to people who need the solar power. DRRI solutions can adjust the rates according to solar energy output, as well as address all of the needs of the power grid when solar energy output fluctuates wildly.

Potential Concerns

However, there are several problems when it comes to applying DRRI solutions. Various financial risks, technical issues and regulatory problems present an issue to implementing DRRI solutions in various places:

  • Load availability is a problem. Even though specific loads would make great candidates for a DR solution, they are not available 365 days per year (or when solar energy is being over-generated).
  • There are some regulatory problems (yes, even with solar power generation and consumption). In some areas, regulations make it difficult for DR to be used as an ancillary service. There are minimum loads required to participate, and some regulations are even restricting the financial incentives of the DR solutions.
  • Although many customers already know about DR systems that give them a day-ahead notice for a few important events every year, few of them can cope with an increase in these notices. DR programs that are now in place may need to be modernized if fast DR is to be implemented when dealing with renewable energy (including solar).

For the DRRI system to be effective, utilities and other solar power vendors are presented with a few recommendations. Among the most important tips are:

  • Always think about the customer instead of thinking about the value of the solar energy. Financial incentives for the customers consuming solar power should be an important concept to consider.
  • DR has several integration requirements if one wants to use it for renewable power – like solar energy. Always keep an eye on new tech and also on strategies for the customer. Customer concerns are always important.
  • Be efficient, especially economically. However, don’t discriminate against specific resources. While solar is definitely a very important source of energy, wind and geothermal are also viable sources.
  • Your portfolio should be flexible and include several options. If you don’t have the necessary technology or infrastructure, why not partner with other solar energy providers that do?
  • Think about solar power storage, electric vehicles, and other interesting resources. However, ensure that the various kinds of resources are not in competition.

According to the Demand Response for Renewables Integration report, the DRRI revenue on a global level will reach $1.3 billion by the year 2026. At the time of writing, it is just around $130 million. Europe is expected to be the main generator of revenue, with almost $500 million in 2026. North America will be close behind, with just under $400 million. The DRRI solution is gaining ground rapidly. Continue to stay on top of solar news to see what the future brings.



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