Building Demand Flexibility Can Function as Non-Wires Alternative

Building-to-Grid is one of seven emerging energy platforms in Guidehouse’s Energy Cloud 4.0 vision of a more sustainable and dynamic energy system. Within this technology space, building demand flexibility is defined as the capability of controls and end uses that can be called on to provide benefits to building owners, occupants, and the grid. Demand flexibility differs from traditional demand response as it does not require end users to alter their energy use. Rather, it is a continuous process that can be used as a virtual power plant because of its ability to shed load at peak times, shift load to off-peak times, and modulate power draw to maintain system frequency or control voltage without interrupting the end user’s comfort level. This continuity is achieved through two-way communication with grid connected devices for water heating, space conditioning, and household tasks. Flexible building loads from increasing end use electrification can be aggregated to provide numerous benefits to the electric utility, including allowing it to defer transmission and distribution upgrades.

On May 17, 2021, the U.S. Department of Energy’s Building Technologies Office published A National Roadmap for Grid-Interactive Efficient Buildings. It was developed by a team led by Lawrence Berkeley National Laboratory and Brattle Group with support from the Building Technologies Office. The report builds on the assertion that building loads can provide services to the grid with results that show the magnitude of the impact that aggregating those loads can have on peak demand. When determining the impact of flexibility, the report did not include rooftop solar, battery storage, backup generators, or EV charging loads at buildings. It also stipulated that the flexibility must be enabled by controls, not behavioral or manual actions from the customer.

Non-Wires Alternatives Projects Are Increasing

Increased peak demand is one of the drivers for utilities to pursue upgrades to traditional transmission and distribution. However, in recent years, numerous utilities in the US—especially those in New York and California—have pursued non-wires alternatives projects in place of traditional transmission and distribution upgrades. These projects include a combination of technologies, such as distributed generation, energy storage, backup generators, and combined heat and power. Demand flexibility can serve a similar purpose as other non-wires alternatives. However, it is rarely considered in utility resource planning for reasons including lack of financial or regulatory incentives and modeling constraints. Some states have started taking regulatory action to help facilitate demand flexibility opportunities. In 2019, Washington passed a law requiring all electric water heaters manufactured after January 1, 2021, to have a communications port capable of making them grid enabled (consumers opt in to having their heater controlled by the grid operator). This means that any building in the state with a new water heater is a potential grid resource for utilities.

Demand flexibility from residential and commercial buildings has the potential to be an effective resource in reducing peak demand. It should start to be treated as a non-wires alternative in utility resource planning as devices that enable its use in buildings become more prevalent.