The penetration of renewable energy technology in the U.S. is expected to increase dramatically over the next decade, as many states are implementing policies to expand this sector. However, the variable – and oftentimes, unpredictable – production of certain renewable energy resources – such as wind and solar – poses integration challenges for bulk-power system operators.
These findings come from a recently released study from Lawrence Berkeley National Laboratory entitled ‘Mass Market Demand Response and Variable Generation Integration Issues: A Scoping Study.’
Proponents of the smart grid, of which advanced metering infrastructure (AMI) is an integral component, assert that system-wide implementation of AMI enables a significant increase in demand-response (DR) capability, which could help facilitate the integration of variable generation resources in the bulk-power system.
Key findings of the Berkeley study include the following:
– The largest variability and uncertainty in renewable energy generation and power production are from wind and solar resources over time periods of one to12 hours – time scales that are in synch with the operation of most DR opportunities for mass-market customers.
– Among time-based rates, real-time pricing, coupled with automation/control technology, has the most potential for managing several variable generation integration issues, although the current lack of regulatory and stakeholder support is a key challenge.
– Incentive-based DR programs have significant potential to manage many variable generation integration issues if residential customers are willing to participate in programs whose designs feature short-duration and frequent DR events. Program designs that allow load aggregators to participate effectively and customer acceptance of control and/or automation technology are key factors that will determine the efficacy of these DR programs in managing variable generation integration issues.
– Accessing DR resources to facilitate the integration of large-scale variable generation is likely to require additional changes in market rules and regulatory policies. For example, many jurisdictions may need to consider modifying existing retail market tariffs so that utilities can treat customers as a portfolio of resources that can be differentially dispatched. Wholesale-market product definitions may need to be expanded, and/or market operations may need to be restructured, to allow DR to offer and be paid for providing these services.
– System operators and policymakers should give serious consideration to DR as an additional strategy to facilitate the integration of large-scale variable generation resources, which will require more systematic analysis of perceived risks, costs and benefits of the various strategies.
The full report is available here.