Utilities are no stranger to the effectiveness of demand response when accounting for peak energy periods. However, as the United States continues to experience record-high heat waves and shifts in business operating trends due to COVID-19, many utilities are burdened with properly accounting for unpredictable energy usage patterns.
As demand response has become an increasing share of utilities' resource mix, it's more vital than ever that these resources remain predictable, even during uncertain times. But how can utilities be assured that demand response resources will be available when needed as they face unpredictable load patterns and historical challenges in their region?
To provide insight into how demand response programs are adapting to today's energy landscape, we spoke with Joel Obillo, Head of Demand Response at Enel X North America, who discusses why this summer has showcased the core benefits provided by demand response and active portfolio management programs when accounting for unpredictable energy patterns.
Q1. Utilities have been utilizing demand response programs for more than a decade to help balance the grid while providing C&Is with an economic benefit. What has been so unique about 2020 from an energy perspective, and what role has demand response played in supporting the grid this past year?
2020 has brought unprecedented disruption for consumers and businesses, making energy usage near impossible to forecast. Despite low demand in the spring due to COVID forcing 42% of the labor force to work from home, unusually hot temperatures across a broad swath of North America has led to historical demand levels in some regions. This is where demand response can actually serve as a sustainable resource for increasing grid resilience while keeping electric prices affordable during energy peaks.
So far this summer, we've seen high demand across several regions including New York, Ontario, Arizona, New England, the Tennessee Valley, and parts of PJM.
Through the first three weeks of July alone, scorching temperatures across the map have resulted in demand response events happening on an almost daily basis. To support this strain on the grid, we've successfully worked with our C&I customers to dispatch more than 600 MW of demand response resources to support local grids across each impacted region.
In New York City alone, where persistent heat caused electricity use to reach levels not seen since 2013, we have provided critical capacity, dispatched from a front-of-the-meter battery storage system in Brooklyn, the largest operational system in New York City. So far this summer, the system has responded to 13 dispatch events for 52 hours, delivering more than 188,000 kWh to the grid.
In Ontario, the combination of high temperatures and the Industrial Conservation Initiative (ICI) peak hiatus, which allows ICI participants to maintain full operations rather than reduce energy demand during peak hours, resulted in dispatches over a two-day period in the first half of July.
Across the map demand response proved critical and reliable, as Enel X successfully worked with its portfolio of C&I customers to identify available resources.
Q2. There's no question among utilities regarding the value of their current demand response programs. Why are we now seeing a resurgence in utilities implementing these programs?
While more people than ever are working from home this year and using AC at a high rate, the high temperatures we're seeing are not unique. Extreme weather is becoming more the norm than the exception, and we're seeing more and more utilities prepare for that.
Further, market trends like load growth and the retirement of older, traditional sources of generation are creating need for added capacity. Demand response offers a sustainable and fast-to-market option for filling resource gaps.
Additionally, demand response plays an important role in sustainability efforts as it can help states avoid relying on peaker plants and dirtier fuel sources, making them well-received by state governments. As a result, some states and regions may even offer additional incentives in order to promote policy surrounding demand response.
Q3. As we look ahead, how are utilities integrating demand response with other services and solutions to support greater reliability?
Going forward, we expect to see demand response be a critical component of any utility's flexibility portfolio. As highlighted above, battery storage has played a key role meeting demand in New York City, and the ability to enroll a battery storage system into a utility's demand response program will help deliver maximum value on that energy asset and added benefits to the electric grid.
In addition to promoting battery storage, utilities have also begun investing in their own electric vehicle infrastructure. While charging, EVs have the potential to serve as distributed energy resources. In California, Enel X has deployed a 70MW highly distributed virtual battery, which is essentially the aggregate capacity of our JuiceBox home charging stations, which participate in wholesale day-ahead and real-time markets, all while helping to balance grid demand. We also just wrapped up a smart charging program with Hawaiian Electric, where we saw an average demand response participation rate of over 90%, which is consistent with other utility programs.
If 2020 has showed us anything, it's that energy management is becoming increasingly more complex. Extreme weather and natural disasters such as heat waves and wildfires, coupled with an unprecedented global health pandemic, is creating an urgent need for the accelerated deployment of more distributed, and complementary, energy solutions like demand response, battery storage, and EV charging. By taking a holistic, customized, and collaborative approach that integrates smart solutions utilities are able to address these near-term challenges while building a more modern and sustainable system in the years to come.
To find out more about how demand response can support your utility and company, visit EnelX.com.