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The Role of Storage and Demand Response. English (PDF).
Demand response and storage are tools that enhance power system flexibility by better aligning variable renewable energy (RE) supply with electricity demand patterns:
Examples of storage technologies include fly wheels, compressed air energy storage, batteries, and pumped-hydro storage, among others. Demand response typically involves a voluntary and compensated programs that enable a power system to encourage or directly control load reduction as needed to maintain grid stability.
Power system operators can weigh the benefits of demand response and storage against implementation costs. Many storage technologies are still costly and somewhat inefficient—only 70-85% of stored energy is recoverable. Demand response programs do not incur such an efficiency penalty. However, demand response programs do have significant implementation costs, for example, to attract participants and manage their electricity demand. In many cases, demand response is most effective when combined with advanced metering Infrastructure (AMI), which can provide detailed end-use load information and continuous remote communications.
Due to the challenges in quantifying the point at which storage or demand response becomes the least-cost flexibility option, evaluating the role of these interventions in a power system with high variable RE requires continued analysis, improved data, and new techniques.
The following are potential mechanisms to encourage demand response and storage.
Energy Storage Requirements for Achieving 50% Solar Photovoltaic Energy Penetration in California
National Renewable Energy Laboratory, 2016
This report estimates the storage required to enable PV penetration up to 50% in California (with renewable penetration over 66%), and quantifies the complex relationships among storage, PV penetration, grid flexibility, and PV costs due to increased curtailment. The authors find that storage needs depend strongly on the amount of other flexibility resources deployed. With very low-cost PV (three cents per kilowatt-hour) and a highly flexible electric power system, about 19 gigawatts of energy storage could enable 50% PV penetration with a marginal net PV levelized cost of energy (LCOE) comparable to the variable costs of future combined-cycle gas generators under carbon constraints.
Federal Energy Regulatory Commission, October 2013
Market and Policy Barriers to Energy Storage Deployment
Sandia National Laboratory, September 2013
This report details the barriers that restrict the deployment of energy storage technologies in the United States. The findings are based on interviews with stakeholders and review of regulatory filings in four regions roughly representative of the country. The report suggests that while high capital costs remain a barrier to energy storage, deployment is also impacted by regulatory, market (economic), utility and developer business model, cross-cutting, and technology barriers. The report also presents a discussion of possible solutions to address these barriers and a review of initiatives around the country at the federal, regional and state levels. [Also, read an earlier discussion of barriers to storage deployment].
Pacific Gas & Electric Company (PG&E) SmartRate: Product Design Converges on Customer Experience
Association for Demand Response & Smart Grid, September 2013
This case study is based on interviews with PG&E (a California utility) and explores the institutional circumstances surrounding the implementation of PG&E''s SmartRate™ dynamic rate program. The case study focuses on implementation and procedural challenges, reactions and perceptions of stakeholders involved, and lessons learned. The case study is not intended to evaluate the program but offers insight into the internal workings, attitudes, and relationships of a utility successfully implementing a demand response program.
Rate Design Where Advanced Metering Infrastructure Has Not Been Fully Deployed
Regulatory Assistance Project, April 2013
This paper focuses on foundational rate design principles that are typically associated with conventional meters. Despite growing deployment of smart meters, most electricity customers are served by conventional meters. The wide variety of pricing practices discussed in this paper highlight global case studies that have exhibited the ability to enable system operators to send price signals that alter retail customer behavior, affect needed capital improvements, and influence a utility''s capital investments.
Energy storage resources have the capability to provide a variety of ancillary services to the grid. This table provides descriptions and identifies performance requirements of ancillary services and key characteristics important for energy storage resources. (Click image to see full size.)
Effective Mechanisms to Increase the Use of Demand Side Resources
Regulatory Assistance Project, January 2013
Four categories of mechanisms are defined for increasing deployment of demand side resources. (Click image to see full size.)
Mass Market Demand Response and Variable Generation Integration Issues: A Scoping Study
Lawrence Berkeley National Laboratory, October 2011
This report examines how demand side resources could be used to facilitate the integration of wind and solar resources into the bulk power system, identifies barriers that currently limit the use of demand response, and suggests factors that can assist decision makers in assessing alternative strategies for integrating wind and solar resources in the bulk power system. The study examines the role of the widespread deployment of Advanced Metering Infrastructure and smart grid systems to mass-market customers in managing the integration of variable RE, primarily in the context of United States power systems. It also assesses how market and regulatory practices can be modified to better enable demand response technologies to facilitate variable RE integration.
Coordination of Energy Efficiency and Demand Response (National Action Plan for Energy Efficiency 2010)
National Action Plan for Energy Efficiency, January 2010
This paper summarizes existing research on the relationship between energy efficiency and demand response. Energy efficiency measures and rate design can impact investments towards demand response measures (and vice versa). Using information gathered through interviews with program administrators, customers, and service providers, this paper suggests four ways to coordinate energy efficiency and demand response programs (combining program offerings, coordinating program marketing and education, enabling market-driven coordinated services, and developing building codes and appliance standards) and also discusses barriers and opportunities to facilitate coordination.
Xcel Model Semi-Dispatchable Renewable Power Purchase Agreement
Xcel Energy, a vertically integrated utility located in the United States, has released their Model PPA for Semi-Dispatchable Renewable Resources, which are defined as intermittent renewable resources such as wind and solar combined with technologies that can mitigate intermittency issues such as backup natural gas or batteries. Although the PPA text refers to a solar-thermal generating facility with a backup combustion generator, the text would be modified for other combinations of generation and storage. The Model PPA:
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