Considerations for leveraging flexible loads to decarbonize electricity and transportation
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Energy Sector Analysis
As regions increase their dependence on intermittent sources of power generation, the value proposition of flexible technologies will increase to improve the utilization of these resources.
Considerations for leveraging flexible loads to decarbonize electricity and transportation* By Alexander Headley and Mitch Ewan
M
ore regions of the world are looking to decarbonize electricity production using wind and solar power generation. This major transition from traditional power sources comes with a number of technological difficulties for grid operators and a myriad of political, economic, and technological options to correct these issues. Often, the root problem associated with renewable power generation is posed as one of generation intermittency. The current grid model is based on one where generation is continually altered to match the current demand of the end users, so naturally the focus trends toward what can be done to make the intermittent generation match the daily demand. This has led to a strong focus on developing new energy-storage systems to create systems which are capable of shifting energy at the scale that will be necessary to support grids with a high penetration of renewable resources. Along with technological advancements in storage is the need to develop appropriate financial incentives and policies to encourage installation of technologies that will be most beneficial to the grid as a whole. For instance, at the operator level, energy-storage systems have gained a lot of interest for applications, such as frequency regulation, because of the potential for a high rate of return. However, other functions for which a battery system would be well suited at a technical level are not yet compensated in a way that encourages widespread interest. It is not enough for an appropriate technology to exist; financial mechanisms have to be in place to encourage investment in said technology. However, the intersection of policy, technology, and financial planning concerns can be very tricky to navigate. This is true for end users as well. In acknowledgment of the fact that the intermittent generation problem can be posed more globally as a mismatch of supply and demand, many utilities are developing pricing structures to encourage end users to modify their demand to more appropriately match their generation capabilities. One method that is commonly viewed as a good option is time-of-use rate structures, which increase electricity costs during times when it is expensive or difficult to produce electricity in hopes of encouraging changes in demand to match generation. End users then are faced with the question of how to modify their behavior or system to minimize their expenses, and again, the number of possibilities can be staggering. If loads could be shifted freely, they could simply move their demand to low-cost
times of day. While this can be carried out with some loads, often the amount of load shifting that can be done is limited by noneconomic factors (e.g., acceptable wor
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