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What if, instead, demand side customers are provided with incentives to reduce their electricity usage during extreme circumstances?
In the aftermath of the Fukushima nuclear disaster, Japan adopted demand response as part of its solution, and in 2014, Korea introduced laws to encourage its use. The development of Smart Grid technologies has greatly enhanced real-time information communication between different entities in the power system. This allows end-users to adjust their consumption patterns instantly based on updated market information, in accordance with their own price preferences or contracts.
The basic concept behind demand response is that instead of paying to increase the available capacity of electricity, we pay to decrease the amount of electricity we consume. This approach is not only more cost-effective but also more efficient. While there are no guarantees in electricity generation and blackouts have always been a possibility, demand response significantly reduces the risk of events like the recent incident in which the city narrowly avoided a power outage as temperatures soared and some power plants failed.
Data from Electrical Japan
Although demand response initially focused on large consumers, the emergence of intelligent devices now enables small consumers, such as residential loads, to participate in the energy market. However, these small consumers are geographically dispersed, have limited capacity, and are difficult to directly control by the system operator. To address these challenges, technologies such as load aggregators (LAs) and virtual power plants (VPPs) have been introduced.
As an intermediate agent, Greenphard bridges the gap between the Distribution Company (Disco) and end customers. By aggregating the demand response resources in a local area, we represent you as the demand-side customers and interact with the Disco in the retail market.
Under the initial program, it is anticipated that electricity users would receive an annual payment of up to 0.2M [USD/Year] for maintaining 3MW capacity on standby, ready to be taken offline. The goal is for this backup power to be rarely utilized, with no more than 10 occurrences per year, each lasting no longer than four hours.
Participants in the program could include large industrial operations, such as water companies, willing to temporarily suspend certain pumping activities. It could also involve commercial users who are willing to adjust or postpone their production for a few hours. Additionally, energy retailers themselves could enroll households in the program. Households in the program may choose to delegate control of certain appliances, like pool pumps and air-conditioners, to the retailers, allowing them to be turned off if necessary.
Participants can choose to subscribe for DOWN DR (D-DR) and/or UP DR (U-DR). D-DR is more well known where power consumption is reduced upon request when power grid is lacking power. U-DR is conducted when there is surplus of power in the power grid. This happens especially with renewable energy such when solar power is abundant or strong wind is available for a long time in large scale.
Greenphard Energy will help automatically conduct D-DR and U-DR.