Friday, August 29, 2008

No Demand Response, no progress

Interesting day yesterday attending a meeting of the DR (Demand Response) group in Dublin. Jerry Sweeny has talked in detail on his blog about the importance of getting Demand Response in Ireland in order to be significantly increase the amount of wind on the grid.

What became clear to me at this meeting, was that without DR it is going to be hard to make progress on a number of fronts in reducing our dependance on imported energy.

Wind is great if it blows at times of high demand but is a problem if it blows when demand is low. On the grid supply must equal demand and while supply can be increased or decreased by bringing power stations on line, demand is more difficult. When supply is predictable, the high tarriffs for periods of high demand and low tarriffs for periods of low demand help to reduce the peaks and fill in the toughs. But when supply is unpredictable, such as wind or wave, there is currently no way of increase or decreasing demand in real time. This will lead to the situation where wind farms have to be turned off if there is not enough demand.

But if we could make electricity behave more like the financial markets by decreasing the price when supply was plentiful (summer nights) and increasing the price when supply was tight (cold windless evenings) then we could start choosing when to buy electricity depending on price. We all have electricity loads that we can't move. Shops need the lights on when the shop is open, the dinner needs to be cooked before dinner time. But there are also loads we can moved, chilling of food in the supermarket and the time we run the dishwasher.

But having real time pricing is just the first step, the next part of the puzzle is to respond to price changes and this has to be automated in order to move substantial loads.

Real time pricing requires the electricity suppliers to supply a price, for that price to be delivered to the customer and for meter readings to be supplied at short intervals so that the customer is charged the correct amount, we need smart meters. Smart meters come in many flavours but all are currently costly - estimated prices for european installation are over €200. For a householder to want to install a smart meter, it must deliver them a saving, so without real-time pricing and DR, the smart meter delivers no benefit for the customer.

Once we have real time pricing, smart meters and DR, the next step is net metering. This creates the opportunity for arbitrage of electricity - you buy the electricity when it's cheap, store it and sell it when the price goes up again. Now the grid could take substantial amounts of wind with market traders ready to suck up any bargains.

Another long term solution to making use of plentiful wind is to build high capacity interconnectors to UK, making it possible to sell electricity to the highest bidders in Europe. But this also depends on having DR across Europe in order for there to be customers able to take maximum advantage of our wind.

It seems to me that DR is a prerequisite for increasing intermittant renewables and for making most efficient use of electricity thereby decreasing carbon emissions. As these items are high on the governments agenda, why is there so little awareness of, let alone committment to, DR?

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