Can Europe catch up to the United States’ lead in demand response? Maybe, but if it does, it’s going to look a lot different than it does across the Atlantic.
That’s because demand response as defined in the U.S. -- that is, turning down power use to restrain peak power demand during hot afternoons -- isn’t the same demand-reduction problem facing most of Europe. Rather, it’s a need to cut carbon emissions, avoid congestion on power lines, and perhaps most critically, integrate the massive shares of intermittent wind and solar power coming online over the next decade.
These kinds of power demand management challenges are hard for traditional demand response to manage. But they’re a perfect fit for the next generation of demand response technology, which promises to speed up, automate and integrate power-reduction technologies with the smart grid at large.
That’s the goal of a pilot project by U.K. utility Scottish and Southern Energy and Honeywell, which is trying to popularize a demand response technology known as automated demand response, or auto DR. Honeywell is already rolling out auto DR projects in California and other U.S. utilities, and earlier this year launched a pilot project in China, but this commercial and industrial demand response project announced Thursday is its first foray into Europe.
It’s also aimed at a particular problem, noted Jeremy Eaton, VP of Honeywell Energy Solutions: reducing peak power flow on a congested power grid serving the London suburb of Bracknell. This town is home to office parks for high-tech companies such as Dell, Panasonic and HP, which means it needs clean and stable power. But it’s also in a dense urban area where most of the power lines are buried underground, making a physical upgrade of the power-delivery infrastructure quite expensive.
The alternative -- reducing stress on those particular feeder lines -- requires pinpoint accuracy in reducing power load in specific buildings, Eaton said. Luckily enough, Honeywell’s system is designed to do just that, via a combination of its Tridium building management system control units and its Open Automated Demand Response (OpenADR) servers built by Akuacom, a company Honeywell acquired last year.
Automated vs. Traditional Demand Response
OpenADR is an open standards-based technology for sending load control and pricing signals that was developed at Berkeley Labs over the last decade. Akuacom is the primary maker of servers that can translate these signals into commands for building management systems to turn down lights, power down HVAC systems, and the like, though other companies are working on their own OpenADR servers and relay boxes to challenge Honeywell’s dominance in the field.
The fine-grained nature of Honeywell’s system should allow Scottish and Southern to send signals asking specific buildings, or even specific systems within buildings, to shut down at points that will relieve congestion on specific feeder lines, Eaton explained. Of course, whether or not the OpenADR-based systems now out in the field have worked out the kinks in complex building power controls remains an open question in the industry, with many saying it needs much more fine-tuning to deliver on its promises.
In either case, what Honeywell is trying to do is a much different proposition than the traditional U.S. demand response setup, where utilities or grid operators typically need to reduce peak power usage across entire states or regions. To get there, they can rely on an aggregate, wide-ranging mix of customers willing to take a variety of actions to help shed that load -- the model upon which U.S. demand response aggregators such as EnerNOC (ENOC) and Comverge (COMV) have built their businesses.
Much of that load shedding can come through actual power use reduction: shutting down big power-using production lines and equipment at factories, lighting banks or air conditioning units in offices and retail stores, and the like. But much of it can also come from a variety of onsite power generation resources, including diesel generators.
Indeed, the U.K.’s primary demand response network, run by National Grid and served by EnerNOC, has about 500 megawatts of diesel generators making up its 839 megawatts of customer-side load reduction capacity. But, as Eaton put it, adding more diesel generators won’t help European utilities like Scottish and Southern meet carbon reduction commitments, which are a key goal for demand response in Europe.
Europe’s Distinctive Demand Response Landscape
The United States had about 58,000 megawatts of demand response capacity as of 2010, representing about 7.6 percent of the country’s total peak load and up from 41,000 megawatts in 2008. While hard figures for Europe are harder to come by, there’s little doubt that its traditional demand response capacity is much lower -- and for good reasons.
As GTM Research’s recent Smart Grid in Europe 2012-2016 report points out, Europe lacks the hot summers and the proliferation of air conditioning systems that make the U.S.’s peak summer power loads so difficult to manage. On the residential side, European homes also consume about one-third of the power of an average U.S. home, giving them less potential for reduction in peak demand. And when there are peaks to be shaved, Europe has a greater amount of pumped hydropower energy storage capacity to help do it.
That doesn’t mean that Europe doesn’t have a market for demand response -- GTM Research estimates that the potential peak reductions could range from €3 billion to €9 billion per year. A recent report by Capgemini, VaasaETT and Enerdata (PDF) paints an even rosier best-case scenario, saying a full deployment of automated demand response by 2020 could save €25 billion in annual power bills and €50 billion in deferred generation capacity -- although it goes on to say that this best-case scenario doesn’t seem likely at present, given the slow growth of the industry and the current lack of regulatory support.
Still, there’s a good reason for both Europe and the United States to focus on more automated and faster-acting forms of demand response: it could be the only way the industry can play a role in managing intermittent power sources like wind farms and solar panels. The Capgemini report calls demand response measures a “major opportunity for the energy industry” to help manage Europe’s massive growth of wind and solar power, which will account for about 40 percent of European generation capacity by 2020. In fact, without it, the only option will likely be to build lots of backup fossil fuel-fired power plants, the report notes.
Auto DR as Solar and Wind Balancing Act?
Automated demand response is important for managing on-again, off-again wind and solar power because those power sources can shift from full capacity to nothing in seconds, rather than the 10 minutes or more that most of today’s programs allow for demand response to kick in. While pilot projects are underway to link demand response to managing wind power (EnerNOC’s project with the wind-rich Bonneville Power Administration is one example), the vast majority of demand response today isn’t linked with the systems that exist for managing intermittent generation.
Will Honeywell’s Auto DR system help play a role in this future need? Eaton said that managing wind power isn’t an explicit part of the pilot project with Scottish and Southern Energy. Still, Honeywell is working on some projects to develop technology to help manage intermittent wind power, he said, though he wouldn’t give details.
At the same time, the kind of localized building energy control Honeywell will be working on with Scottish and Southern could apply itself to managing the intermittent power coming from rooftop solar panels. Germany’s utilities may well be the first in the world to be faced with neighborhoods that have too much rooftop solar for utilities to manage -- and fast-acting, automated, house-by-house demand response could be one way to manage the ups and downs of those panels’ output.
Eaton said that Honeywell is also working with other customers to manage distribution feeder congestion and other localized grid problems using its automated demand response system, though he wouldn’t say where.