Grids wrangle with demand response growth

22 May 2020
Argus Media

Washington, 22 May (Argus) undefined Electric grid operators are raising concerns that dispatching demand response resources more often could create inconveniences that prompt participants to drop out, making the capacity they provide to the grid less predictable.

"As we lean on these resources more, what is going to happen to participation?" Midcontinent Independent System Operator demand response advisor Mike Barber said yesterday in Washington, DC, at a conference held by the Association for Demand Response and Smart Grid.

Treating demand response assets more like regular generators, rather than as a last resort, has been a key priority for independent system operators (ISOs) as they work to replace capacity from retiring coal units and incorporate variable generators such as wind and solar.

But officials running the electrical grid said they worry there could be risks with interrupting the electricity supply of demand response participants more often, even as it would provide participants with higher compensation.

How much demand response participation changes will likely depend on the expectations of customers, PJM Interconnection demand response operations manager Pete Langbein said. He predicted the greater dispatch will lead to "ebbs and flows" in demand response participation that in turn challenges its predictability.

ISO New England demand resource strategy director Henry Yoshimura said that with the loss of generation from retirements and gas pipeline constraints into the northeast that could limit fuel supply, there could be "extended dispatches" to demand response customers. He said operators will need demand response to be more flexible and available for longer periods of time.

The demand response business model of requiring customers to interrupt their electricity consumption in exchange for a payment "in the long run, it is not viable," Yoshimura said. It instead needs to evolve into managing distributed generation, energy efficiency, energy storage, electric vehicles and other new choices in the market.

Beyond the concerns about how dispatch could affect participation, the ISO officials said they are putting in place testing requirements to ensure that demand response will perform when it is dispatched and want to expand the use of demand response to provide other ancillary services.

California demand response resources could begin to play a role in helping address the growing need to quickly ramp up generation in the evening as the state's large amount of solar capacity drops at the same time electricity demand increases from customers coming home after work.

California ISO regulatory policy manager John Goodin said the ISO is about to file tariff language at the Federal Energy Regulatory Commission to allow demand response to qualify as a flexible capacity resource that could help meet the ramping needs.