The solar sponge: shifting demand to soak up production

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An unfortunate reality for the solar industry is that as more solar goes online, it wipes out mid-day demand, shifting peak to later in the day. As this continues, net mid-day demand gets lower and the gap between mid-day demand and evening demand gets steeper, leading to a phenomenon described as the duck curve. This issue is addressed in Smart Electric Power Alliance’s (SEPA) 2018 Utility Demand Response Market Snapshot.

A traditional school of thought has been to alleviate this curve by rolling out mass-usage of short-term battery storage, coupled with the use of demand response programs, which incentivize electricity users for reducing consumption during times of peak demand. According to SEPA, while only 2.4% of utilities are currently using demand response to alleviate grid fluctuation in areas with high renewable energy penetration, 24% have plans for future implementation and another 54% are considering adding it as well.

While demand response is all well and good for reducing peak demand, the issue of curtailment still remains due to the fact that demand response addresses peak demand rather than peak load time realignment. And it what may seem ironic to solar proponents, Arizona Public Service (APS) has found itself on the forefront of progressive energy policy, through a process SEPA refer to as reverse demand response. Reverse demand response is based upon the model that APS introduced in  their Demand Side Management Plan for 2018. The idea is to incentivize shifting as much of the peak load as possible to peak production times. This is an especially critical measure for western utilities, when the duck curve can lead to instances of negative energy prices.

APS outlines that the energy provided by their form of reverse demand response would be free, saying:

This pilot will work with qualifying non-residential facilities to identify opportunities for dispatching loads in response to negative pricing events… Customers would identify beneficial but non-essential loads that could be operated in response to an event signal. These loads would be sub-metered and provided with no-cost energy during these event periods. This pilot provides load flexibility to help address duck curve challenges and reduce the need to curtail solar during periods of negative pricing, responsiveness that puts a downward pressure on all customer rates. To be eligible, the dispatchable customer load must have a demand of at least 30kW.

APS has coupled this with the implementation of new time-of-use (TOU) rates, which uses the idea of demand response in energy price determination, as SEPA outlines in the graphic below.

Large-scale adoption of reverse demand response has been identified as a realistic form of load shifting by SEPA, a critical element to… curtailing curtailing. And while a much larger national scale of load shifting may require more comprehensive programs, free energy isn’t the worst place to start.