The role of demand side management in the sustainable electricity system of the future

Abstract

A sustainable energy future will require elimination of fossil fuelled electricity generation and increased renewable generation. A major issue with replacing fossil fuel with renewable generation is the increased variability of supply. Fossil generation is highly controllable; its power output can be quickly adjusted to match instantaneous demand. Renewable generation however, particularly wind, is not; its output is determined by meteorologically fluctuations rather than our demand. Although New Zealand is fortunate to have hydro power which is controllable and used to match supply with demand, previous research has shown the limits of this system. As wind generation has increased, gas peaking plants may be realised on more, more to fill the gap between supply and demand. A potential mechanism for addressing increased variability of electricity supply is to use demand side management (DSM); essentially, modifying our use of electricity to fit within renewable supplies rather than utilizing fossil fuels to match our demands. DSM is already used in today’s electricity system. However, it is used to reduce load during the predictable morning and evening demand peaks such that load is kept within the limits of the distribution network, not in response to renewable energy availability. This research investigates the extent by which DSM can modify demand to match variable renewable energy resources. The definition of DSM used in this research includes not only short term load shifting, but also end use demand reduction, such that seasonal variability of renewables is also considered. Using historic load shedding data, the timing and magnitude of existing demand side management activities is quantified and modelled. Coupled with historic generation data classified by fuel type, a number of “what if” scenarios are explored. Specifically, New Zealand’s fossil fuel consumption (and carbon emission) from electricity generation if 1) Currently consented renewable generation was operational during the historic study period 2) DSM was further utilised in response to renewable energy variability 3) Additional demand side measures (i.e. increased solar water heating) were included over the study period Results show that existing DSM capacity can provide some benefit in further utilising renewable electricity during periods of excess supply, and reducing demand during periods of low generation. The full extent to which DSM can compensate for renewable electricity fluctuations is dependent on specific DSM measures, and crucially, the renewable energy mix. The research shows that both demand and supply energy polices/initiatives must be considered together to ensure a sustainable energy future. Programs that aim to increase the uptake of a specific demand measure without consideration of the likely renewable supply mix may not achieve an optimum outcome, as will a market environment that encourages one type of renewables generation over another, without full consideration of demand flexibility