The following is a contributed article by Arian Aghajanzadeh, an energy and water researcher at Lawrence Berkeley National Laboratory.
When the demand response giant, EnerNOC, acquired M2M Communication in 2011, it was seen as the pivotal point for agricultural demand response. Greentech Media speculated that 2013 would be the year when agricultural demand response takes off.
But fast forward to 2019 and only a small fraction of agricultural customers in California and other states with large irrigation loads are participating in demand response programs.
Top irrigated agricultural states such as California, Texas, Kansas and Montana are also the ones with aggressive renewable electricity targets and are in desperate need of flexible loads to offset the intermittency of those renewables. Although that flexibility should come from a schedule of options such as batteries, electric vehicles, etc., a substantial resource such as water pumping for agricultural irrigation should not be overlooked.
Agricultural loads, with their potential flexibility, can help improve grid stability and reduce costs for utilities and ratepayers as energy markets move into a future of increasingly distributed, 100% renewable energy generation. It is worth mentioning that unlike batteries and other alternatives to grid management, agricultural demand response comes at a very low cost to consumers.
"[A]gricultural water pumping has a technical potential of providing 57% of current California's 2.1 GW of Demand Response capacity."
The recent California Public Utilities Commission demand response potential study, documented that only 4% of agricultural customers in California are participating in a demand response program through either their utility or a third party aggregator.
According to the California Energy Commission, the agricultural and water pumping demand in the year 2015 was about 1.2 GW. Assuming all that demand can theoretically be controlled for demand response, agricultural water pumping has a technical potential of providing 57% of current California's 2.1 GW of demand response capacity.
As of 2017, California had an existing energy storage capacity of about 3.6 GW (3.1 GW of pumped hydro storage and 0.5 GW of behind-the-meter storage). The state has mandated an additional 1.3 GW of energy storage to be deployed by the year 2020. That energy storage requirement is mostly needed for mitigating the steep ramp requirements during evening hours (typically 4-7pm).
According to a recent Berkeley Lab report, California farms use on average 1 GW of electricity to irrigate during the hours of 4-7pm. In theory, that demand can be shifted from evening hours to midday hours and water pumping for irrigation can be treated as virtual battery storage.
The shift in available resources just by modifying irrigation schedules can meet almost all of California's 2020 mandate for energy storage. When moving beyond California and including all Western and Midwestern states, those technical potential numbers can be expected to increase by sevenfold.
All that evidence points out the fact that the agricultural sector is of substantial value to the gird and theoretically can meet several grid needs for many years to come. But why is agricultural demand response such an overlooked resource?
Why didn't it take off in 2013 as expected?
What did the utilities, aggregators, farmers, the agricultural technology (AgTech) community, and the demand response research community miss?
It turns out that M2M's automation technology was a great first step, but not enough to crack the code.
"Existing demand response programs need to be re-designed and new market-based approaches such as real-time pricing and transactive energy need to be developed."
The two most important barriers to demand response adoption in the agricultural sector are technology (e.g. automation and controls) and stakeholder coordination (e.g. utility programs, water delivery schedules, etc.). So far, a lot of focus has gone toward developing technologies for facilitating demand response on farms.
Since 2015, the California Energy Commission has invested at least $13 million in technology companies such as PowWow Energy, Antelope Valley Water Storage, Polaris Energy Services, Irrigation for the Future and Wexus Technologies to develop technologies for agricultural energy and demand management. Those grants were followed up by $20 million in additional funding through Regional Innovation Clusters, such as Cyclotron Road, Los Angeles Cleantech Incubator, Cleantech San Diego and BlueTechValley. However, technology alone will not bring all the benefits.
In developing sophisticated irrigation scheduling and automation solutions for facilitating demand response, the stakeholders forgot about the most important piece, the fact that utility demand response programs are complex.
Every step along the way starting with the demand response application, enrollment, enablement, participation, baseline calculation and incentive payment is cumbersome. Added regulations such as elimination of dual program participation and only allowing new capacity additions once every year, is even hurting farm demand response aggregators, the only entities that have been successful in recruiting irrigation pumps for demand response participation.
The complexity of existing demand response programs is reason alone for the entire agricultural sector to abandon it.
It takes several pieces to fall into place for a successful sector-wide demand response adoption. Throughout California, agricultural demand response programs have proven to be unsuccessful in helping the utilities manage their demand and reduce cost. This indicates that current programs and tariffs do not adequately account for the needs of the grid and constraints that exist on farms.
"Agricultural demand response has to take off soon, because our clean energy future will not be possible without it."
Existing demand response programs need to be re-designed and new market-based approaches such as real-time pricing and transactive energy need to be developed. A new suite of demand management programs should give utilities greater flexibility and their agricultural customers greater incentives to balance the grid and meet the state's mandated 100% renewable target in the coming decades.
Back in 2013 the stars did not align for agricultural demand response. The labor cost was too low to justify the high upfront cost of automation, demand response markets were not mature, dynamic loads were not as valuable, the water, energy, food nexus was in its infancy, and water management practices such as the one mandated by the Sustainable Groundwater Management Act were non-existent.
A lot of that has changed since then, plus the AgTech sector is growing faster than ever before, opening doors to on-farm innovations that were not possible. Farms are moving toward automation and the grid is rapidly decarbonizing and they are doing so in isolation.
Agricultural demand response has to take off soon, because our clean energy future will not be possible without it.