By Drs. Robert & Sonia Vogl
President and Vice President,
Illinois Renewable Energy Association
Every time a storm disrupts electrical service by knocking down power poles and wires, crews are quickly sent out to restore service. According to one observer a recent storm in this area disrupted service in Dixon for two days, one day in Mt. Morris and six hours in Grand Detour. With increasing frequency and intensity of storms, the cost of repairing such damage is certain to rise.
Other cost increases come from utility plans to invest over a trillion dollars in upgrading the grid infrastructure of generating, transmitting and distributing electricity during the next 15 years. A recent report from the Rocky Mountain Institute addressed The Economics of Demand Flexibility which could reduce investments in the grid or supply side by implementing strategies to reduce or shift customer demand.
Growth in demand has stagnated since 2010; U.S. Energy Information Administration estimates it will be less than 1 percent per year over the next 15 years. In order for utilities to recover the cost of their planned investments, consumer bills will have to increase. The Institute suggests a less costly approach focused on reducing demand.
Even though overall demand has slowed peak demand continues to rise and is met by operating expensive peaker plants a few hours a year. For residential customers a reduction in use of costly peaker plants can result from energy efficiency and by shifting consumption to non-peak hours.
ComEd and Ameren have offered customers real-time pricing. About 10,000 ComEd customers use the service. They are provided with estimates of hourly energy prices a day in advance and can adjust their consumption to the prices being charged. On average customers have saved about 12 percent on the cost of their electricity.
With increasingly efficient appliances, increased ability to control them and customer electrical generation, the technical capacity exists to supplement or reduce reliance on centralized generation and its grid. Using these technologies increases the flexibility of demand and helps keep supply and demand in balance.
Electric hot water heaters, electric dryers, automated thermostatic controls for heating and cooling and electric vehicle charging controls offer big opportunities to shift electrical consumption away from times of peak demand while maintaining the quality of service. Solar systems produce electricity during peak demand time which can be used on-site with any excess sent back to the grid or stored in batteries for later use. When PV output begins to decline in the late afternoon, electricity stored in batteries could be used to meet customer demand. A homeowner in our area with a solar system has oriented some of his panels to face west to increase late afternoon production. As system costs continue to decline more panels are likely to face to the west.
Opportunities to reduce demand are substantial and cost effective while increasing system reliability and reducing expensive storm damage and service disruptions. Widespread implementation of flexible demand and distributed generation could reduce the magnitude of the massive, costly and vulnerable grid expansion now envisioned. The changes also harm utility earnings so the question becomes one of how to structure utility rates so both alternative technologies and existing utilities can benefit.