- Power Generation
- Commercial and Industrial
- Residential DER
- Demand Response
COVID-19 Is Driving the Need for Greater System Flexibility
While the world focuses on fighting COVID-19, power system operators are trying to manage the second order effects of society’s behavioral changes caused by the health crisis. Key changes observed in the power sector include a shift in loads from commercial buildings to residential ones as people work from home and a sudden drop in demand caused by business closures.
A Sudden Increase in Variable Renewables Market Share
The initial effect of the shift to working from home and industrial plant shutdowns was a drop in energy demand, which caused a sudden surge in the variable renewables share of the energy mix. This surge is not driven by increased generation. However, as renewable energy has the lowest marginal costs, companies increase their share in the energy mix when the demand curve shrinks. In regions with high solar penetration, this trend will likely continue as we move into the summer months.
Are Distribution Grids Prepared for a Potential Peak in Residential Demand?
As region after region started to lock down, the power sector was generally able to adapt well. Other effects will become more acute as the northern hemisphere moves into warmer weather. Currently, the drop in aggregate load has helped to compensate for some of the location issues, such as grid congestions, that could appear due to increasing residential demand. However, parts of the distribution grid could break down as the unprecedented numbers of people working from their homes start to use their air conditioning units when the temperature rises. This shift could cause a surge in residential demand never seen before, with a peak that starts at 8 a.m. and ends toward 9 p.m. as people stay in their homes.
An article about Texas utility, Austin Energy, reported residential loads were already up 12% the week before Austin's mandatory stay-at-home order. As spring temperatures rise and we trade commercial buildings for our homes, we lose the efficiency, control, and flexibility that the system provides through commercial and industrial demand response (DR) aggregators.
The System Needs to Activate All of Its Flexibility
Many distribution utilities have been adding grid intelligence to their operation and trialing systems to incorporate flexibility into the distribution grid. Most distribution network operators have managed to control the demand shift and changes in the energy mix without significant public hiccups, which reflects the implementation of variable generation and increasing distributed energy resources in their grids.
However, the challenges posed by societal changes have not fully played out. In regions like Southern Europe and significant parts of the US where 24-hour air conditioning is necessary, a surge in distributed demand will increase the need for flexibility. Streamlined communication becomes key at this point—both to understand where there is flexibility and if it can be used during a time of need. Texas saw a glimpse of what can happen when demand spikes with the heatwave in 2019. If distribution utilities do not act now, the peaks seen last year could become the new normal, and local blackouts could be needed to manage spikes.
Distribution utilities need to accelerate any flexibility plans on the drawing board and even plan to implement low tech solutions, such as customer text messages to call for voluntary DR. The lessons learned in 2020 will provide a template for what needs to be done in a future with a higher share of variable renewables in the grid and more distributed energy resources.