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How Energy Storage and DSM Can Help Decarbonize the Grid

Updated: Feb 27, 2019

The UK has a very ambitious climate change goal: an 80% reduction of CO2 emissions by the year 2050. In addition, even without a decarbonisation target, two-thirds of the power plants currently used will reach the end of their service life by 2030, creating demand for new energy sources.

If the climate change goal is to be met while ensuring the grid stays reliable, commissioning new power plants driven by fossil fuels is not an option:

  • Due to their flexibility, gas turbines have been used extensively by power grids throughout the world to meet peak demand. However, there is a limit to how much the UK grid can rely on gas if decarbonisation targets are to be met.

  • Coal power plants have an inflexible output, and their emissions are even higher than those of natural gas. New coal power plants will not contribute to power grid flexibility, and climate change goals are impossible to meet with a coal-intensive grid.

Nuclear power remains controversial, but remains an effective means of reducing emissions. Unfortunately, it is only useful for meeting base load because it lacks the flexibility to ramp production up and down according to demand. The power grid of the future must have the capacity to accommodate variable generation from renewable sources and shifting demand from consumers, while keeping grid voltage and frequency at optimal levels.

Figure 1. How Energy Storage and DSM can Reduce the Carbon Footprint of a Power Grid

Variable Renewable Sources and Smart Energy Consumption

Achieving a low-carbon power grid is only possible with increased use of renewable sources and improved energy efficiency at the point of consumption. Solar and wind power are among the clean energy sources with the highest untapped potential, but their output is determined by uncontrollable weather conditions, and these power plants can’t “follow” demand like those that run with gas turbines. The only renewable source that can adjust production easily according to demand is hydroelectricity, but viable project sites are much less abundant than those for wind and solar farms.

The power grid can only accommodate a greater portion of variable renewable generation if supply and demand are balanced effectively. There are two viable approaches to achieve this:

  • Bulk energy storage can be used to absorb surplus generation, and then provide it when peaks in demand occur. Energy storage can also provide grid-balancing ancillary services that are currently provided by conventional power plants – neither wind not solar power can provide these services by itself.

  • Demand-side management (DSM) can be used to shift consumption to when it is more convenient for both the consumer and the utility company. Basically, all stakeholders in the energy industry save money when peaks in demand are controlled.

Of course, there is a high degree of overlap between energy storage and DSM, and in fact energy storage is part of many proposed DSM systems.

How Can Energy Storage Complement Solar and Wind Farms?

Conventional power plants provide three key inputs for utility companies: energy, capacity and ancillary services:

  • Energy refers to the megawatt-hours injected by a power plant into the grid.

  • Capacity means being able to provide a given output in megawatts instantaneously.

  • Ancillary services are those than ensure grid stability, including voltage regulation, frequency regulation, spinning reserve and supplemental reserve.

The main limitation of solar and wind farms is that they can provide energy, but not capacity and ancillary services because output fluctuates according to weather conditions – this is the main reason why variable renewables can’t displace fossil fuels by themselves. Energy storage is an excellent complement for VREs: although storage systems don’t generate their own energy, they can provide the capacity and ancillary services required for grid operation.

Various utility companies throughout the world are already deploying multi-megawatt battery arrays to improve the integration of VREs with existing power grids. When solar and wind power are complemented with energy storage, the can be used in greater proportion without compromising power grid stability. In August 2016, the UK National Grid signed eight contracts for a total capacity of 201 MW of battery storage, which will have the main purpose of providing power grid stability.

The Role of Demand-Side Management

Demand-side management is a very promising concept, capable of increasing the value of energy storage while providing savings for both utility companies and their clients.

  • DSM allows utility clients to draw less energy when electricity rates are high, and maximize consumption when rates are low. If the billing structure includes extra charges for maximum demand, which is the typical case for commercial and industrial clients, DSM measures can also be used to mitigate them. In both cases, the power bill is reduced.

  • When data aggregation and automation are used to coordinate multiple DSM systems, it is possible to achieve grid-wide benefits. If many homes and businesses shift their consumption away from peak demand hours, the demand reduction achieved can be in the scale of megawatts or even gigawatts.

DSM can contribute to grid decarbonisation by reducing dependence on peaking power plants that run on natural gas – it is just a matter of shifting consumption to when there is surplus energy generation from the combination of variable and baseload energy sources. There is no need to replace all gas power plants being decommissioned if the peak demand for energy has been reduced!

Optimal Scenarios for Each Approach

The main advantage of bulk energy storage is that it can be commissioned relatively quickly, especially when using a modular technology like lithium-ion batteries. However, this comes at a greater cost for utility companies, and the benefits of storage at the point of consumption are negated. On the other hand, demand-side management provides the highest efficiency and benefits at the power grid level, but adoption can be expected to be slow unless there is a breakthrough that reduces upfront costs drastically. DSM can also be developed at a lower cost for utility companies: since consumers receive benefits, it makes sense for them to invest in these systems, and utilities can provide incentives instead of assuming the full cost.

Regardless of whether bulk storage or DSM is deployed, measurement and automation play a key role in ensuring that the system will be able to carry out its intended function. With a decade of experience providing monitoring systems for energy efficiency and renewable energy systems, Logic Energy can be your technology partner for DSM and storage applications. We deliver integrated solutions, offering expertise in both hardware and software, integrating the latest information technologies such as mobile applications, GSM communication and cloud computing.

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