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Going beyond energy efficiency – how can industrial energy users provide flexibility to help decarbonise the grid?

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Siobhan McHugh's picture
CEO Demand Response Association of Ireland

Siobhán McHugh is Chief Executive Officer of the Demand Response Association of Ireland (DRAI), representing 700MW of demand and embedded generation response operating in the energy, capacity and...

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  • Jul 5, 2022
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Industrial and commercial electricity users are acutely aware of the need for processes and equipment to be energy efficient. However, many don’t know there are other steps they can take to actively help to decarbonise the electricity grid and support security of supply, while earning revenue.

Recently, CEO of the Demand Response Association of Ireland (DRAI), Siobhán McHugh, and Head of VIOTAS Ireland, Ed O’Donoghue, discussed opportunities for electricity users to play a role in stabilizing the grid and facilitating the integration of more renewable generation. 

What next after energy efficiency?

Many businesses have already optimised “how much” electricity they use, employing energy efficient equipment, and improving processes to minimise energy usage. In addition to energy efficiency gains, many businesses can also provide services to the power system by shifting usage away from peak times and being flexible about “when” and “where” they use electricity.

Flexibility is an extremely valuable service to the power system as Ireland moves to even higher levels of renewable energy penetration on the grid. Renewable energy sources such as wind and solar are variable, so balancing their output with fast responding flexible demand at industrial and commercial sites helps to manage the power system.

Siobhán explains that two fundamental shifts are happening on the Irish power system over the coming decade. “Firstly, we are to moving to produce 80% of electricity from renewables. This means the power system will require new sources of technical services that used to be inherently provided by conventional fossil-fuel generators. We will need more demand response, more energy storage and interconnection to meet these needs.”

Secondly, she adds, “Total energy demand will increase as we electrify more of our heat and transport needs. We have to make much of this demand flexible to help maintain security and operate a stable electricity system.”

How can industrial customers play a role?

In the context of these clear needs, what can electricity customers do? Ed outlines the demand response model, “Instead of building a new gas fired conventional power plant, aggregated demand response across hundreds of industrial sites creates a “virtual power plant”. This virtual power plant can be used to deliver the system services and capacity that are provided by conventional power plants.”

Demand response aggregators are companies that enable specific electricity loads and assets on customer sites to become part of the power system. They offer an aggregated response from customer sites to provide balancing and stabilisation services to the electricity grid.

Siobhán points out, “The local actions of individual commercial and industrial electricity customers can have a massively positive impact on our national decarbonisation objectives. They will help to secure electricity supplies by giving flexibility to the power system and providing essential system services to operate with higher levels of renewables.”

Power system need for flexibility

When balancing the grid, reducing electricity consumption has the same effect as increasing generation. It uses the latent underlying capability of existing customer resources, minimising the need for additional infrastructure. Siobhán says “Demand response can provide a broad range of services to grid operators to rapidly adjust output, balance the system, maintain a secure power supply, and quickly respond to events.”

Ed explains “If your commercial or industrial business has onsite back-up generation or equipment that can have its electricity consumption reduced for brief periods, then demand response could be a viable opportunity for you.” He continues, “Suitable non-critical equipment may include air conditioning, ventilation, electric heating, water chillers, fans, pumps, and other interruptible loads.” It’s a perfect example of how industrial customers can not only contribute to decarbonization but can earn revenue for providing services to the power system while doing so.

Getting over the “fear factor” and making a real difference

It sounds like an obvious choice for many businesses, so what concerns do customers have that might hold them back? According to Ed, there can be a “fear factor” in doing something that seems quite complex. “Demand response is a sophisticated service, but aggregators are experts at assessing the opportunity and partnering with customers to enable participation.”

He adds, “It’s a real opportunity to do something that makes a difference, not only to the bottom line and sustainability agenda, but in helping Ireland get additional renewable generation on the power system. Very often customers have already gone through an energy efficiency journey and feel they have exhausted all avenues to make a difference. They don’t realise that demand response is a complimentary service, that they may well be able to do it as well.”

Urgent need to support the power system

The need for demand response services is clear when we consider the very urgent need on the power system for adequate generation capacity in the high demand periods during upcoming winter seasons. Last year, EirGrid, the electricity transmission system operator in Ireland, outlined plans for Mandatory Demand Curtailment.

Siobhán explains, “Effectively the plans outlined were for load-shedding – cutting off some large (transmission system connected) customers to avoid widespread blackouts on the power system.” Instead, she says, “Properly incentivising customers to voluntarily reduce demand at times of grid stress, in a way that doesn’t harm their business, should avoid the need to enforce involuntary power cuts and help to alleviate tight capacity margin on the power system.”

Demand response from industrial and commercial electricity users can help provide much-needed security to our power system in the immediate term, as well as playing a key role in Ireland’s vital decarbonization journey. 

About:

The Demand Response Association of Ireland (DRAI) represents approximately 700 MW of demand and embedded generation response across hundreds of industrial and commercial customer sites throughout the island of Ireland. These sites are managed by our members each of whom actively participate in the capacity, DS3 system services, and energy markets.  

DRAI members are committed to shaping the future of the power system through advancing demand side flexibility on the island of Ireland. As Ireland strives to achieve up to 80% renewable generation by 2030, our promise as an industry-led organisation is to champion the development of innovative demand side solutions that are designed to address the system-wide requirement for flexibility.  

The association was formed to give a single voice to companies operating in this space, in order to help facilitate market participation for demand, and provide perspectives on how to design market and system rules to allow greater volumes of active participation by flexible sources of demand.  

Siobhan McHugh's picture
Thank Siobhan for the Post!
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Matt Chester's picture
Matt Chester on Jul 5, 2022

Load management seems more possible than ever because of the digital technologies that have become available. Are there in the pipeline technologies that will help this go to even the next level? 

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