It may seem a grid too far to expect an electricity transmission network to be agile. But as power plants go digital, distributed power grows through renewables and battery storage, and the data lakes connecting it all grow ever deeper, grid operators must stay light on their feet.
New Zealand’s national grid operator Transpower, which runs the country’s high-voltage electricity transmission network, has a reputation for innovation: In 1996, New Zealand was the first country in the world to implement a deregulated wholesale electricity market.
Today, technologies and consumer behaviour are each shifting at flick-switch speed, making it even more vital for grid operators to innovate. Demand Response is a Transpower initiative that helps it manage current power requirements as it plans for the future.
The program allows electricity customers to bid to curtail their electricity consumption for a set period, and be paid to do so. The option was first offered to Transpower’s biggest customers and is gradually being rolled out to smaller consumers, too.
Transpower’s chief executive Alison Andrew explains how Demand Response is critical to the grid operator’s ability to be more nimble in its approach.
“We’ve got long-term assets, so it’s important to get a better idea of what’s coming and what assets you need, not just for today but for the future,” Andrew says. “Demand Response is a really important part of our armoury to help us be more flexible and agile … so that we can avoid over-building assets or early building assets, and get a better feel for what might be required.”
If Transpower can manage peak demand by working with customers to “lighten the load”, it can defer or even avoid costly upgrades to the transmission network.
New Zealand has a target of 90% renewable energy by 2020, and is already achieving that on some days and even during some weeks, with more than 80% on average of the country’s required power generated by renewable sources—mostly hydro and geothermal.
In fact, New Zealand’s agriculture sector is responsible for more greenhouse gas emissions than its energy generators, and bringing more renewables online in New Zealand isn’t as important as finding innovative ways to share the existing surplus capacity of the network.
As Alison Andrew wrote in a recent LinkedIn post, “Using technology to make our lives better, easier, greener, and more efficient is positive … It’s a future where consumers are given the power of choice, and an ability to manage their own electricity use. Preparing now to help enable these changes that will ultimately benefit New Zealand’s electricity consumers is a key focus for us.”
Demand Response runs on GE Grid Solutions software platform, which integrates with a Transpower-developed smartphone app and online portal for customers, and allows Transpower to manage upticks in demand and planned maintenance outages by reducing electricity consumption.
Customers who’ve opted into Demand Response get an email or app message, inviting them to bid to reduce their consumption by a certain amount, for a set period of time, in return for payment at the agreed price.
Early targets of the program were high-consumption factories, supermarket chains, office buildings and irrigation-heavy farms; more recently, hospitals, universities and wastewater treatment plants have joined the DR family.
Customers bid to reduce their consumption for a demand-response event, perhaps by dimming their lights, adjusting the air-conditioning by a couple of degrees, turning off freezers for a short period, reducing water pressure and so on. If it doesn’t suit them to lower their energy use at the time, they simply don’t bid.
As well as allowing customers to make money, Demand Response is helping Transpower meet current demand while deferring more grid build-outs when it’s uncertain what the role of the grid of the future will be, given that the growth of small-scale renewables embedded in the distributed network and battery technology is ticking up in quality and down in cost.
“We’ve just come off a $3 billion-plus grid-build program,” says John Clarke, general manager of systems operations for Transpower. “In New Zealand, it’s not always about having to build a new grid … if solar and other technologies develop, the role of the grid might change. In Australia I know people are concerned the grid might not even be needed. The New Zealand context is a wee bit different because we’ve got lots of renewable electricity, which we think is going to be around for a while. So we still need a good backbone because most of our renewable electricity is located far away from where most of our electricity demand is.”
That includes the massive hydro generation on the country’s South Island, which is connected to the more populous North Island by a high-voltage direct-current Inter-Island link.
Among the possible scenarios, says Clarke, is that battery technology evolves to a point where “the role of the grid changes from having to supply peak demand to one of just transmitting energy, so customers have some local storage available to them in their cities. Under that scenario, it’s possible we may not need to build a lot more grid. So that takes us a full circle back to the role of Demand Response as a deferral mechanism … there’ll also be different ways of operating and configuring the grid that we’re discovering, which will be a role for some of the digital solutions and that that’ll evolve into the future.”
“GE’s technology and market innovations like Transpower’s Demand Response program are already delivering significant value to the NZ electricity sector through this non-network solution,” says Kevin Hart, GE’s country leader for New Zealand. “It’s great to be able to support Transpower’s technology directions and their vision, which is entirely consistent with GE Digital’s directions both globally and locally.”
“As we integrate more variability into the grid, the grid balancing becomes even more challenging and we’re going to have to find smarter and smarter tools,” says Andrew, listing ongoing shifts that include the increase in solar, more electric vehicles plugging in to charge, and two-way flows from distributed generation. “It’s about us trying to be innovative, getting as many different options as we can, being responsive to consumers, doing our bit to keep prices down and improve reliability … There’s changes coming and we need more tools in our toolbox. We’ve done it in a measured way because it’s an investment that is not trivial, and we’re trying to all the time learn, remove barriers, and go again. It’s taken us some time, but we’re getting some good results.”