Demand flexibility demystified

Aaron Hill | Sales Engineer, Simply Energy | August 2021

When I tell my friends that a big part of my job is heading out on the road discussing our Demand Flex platform with staff at commercial and industrial sites, I can see the My Eyes Glazed Over (MEGO) effect kicking in. So, I thought I’d take the time to explain what it is, and why it’s important, so that anyone who can benefit from demand flexibility knows how.

First up, what is it?

At its simplest, demand flexibility is the ability to be flexible with when you use electricity.

Why do we need it?

In New Zealand, energy consumption increases at certain times of the day and year. It’s a bit like ‘peak hour’ traffic, but on the grid. On a cold winter morning or evening, for example, there may not be enough renewable energy to meet demand. The main way New Zealand gets the extra power it needs is by ‘ramping up’ fossil fuel generation.

Demand flexibility provides a more sustainable option and has a significant role to play in getting New Zealand to net-zero emissions. As well as reducing the need for fossil fuel generation it also can help us as new sources of power, like wind and solar, come online. These forms of electricity generation rely on the weather, so bring uncertainty of supply. Demand flexibility, therefore, can play an important role in keeping the balance between supply and demand.

How it works

Demand flexibility relies on customers shifting, reducing, or switching off equipment when the electricity grid needs it. At Simply we’ve developed a control platform that automatically enables this. As well as being better for the environment, we pay customers to participate. There’s no additional time or resource strain on the business and no disruption to operations due to the type of equipment selected, e.g., heating or cooling loads, aerators in wastewater treatment, etc – rather than loads required for processing or production.

How to participate

Right now, we offer customers the opportunity to participate in two types of demand flexibility which support New Zealand’s electricity system.

Frequency Response through Transpower (in its role as system operator)

This type of demand flexibility is focused on maintaining the balance between supply and demand in our electricity system.

We pay customers for making their flexible electrical equipment (like an industrial cold store that can switch off refrigeration) available to participate in the programme.

Participation involves both being on standby and responding to unplanned major grid events, e.g., if a power station unexpectedly goes offline.

Customers can choose to participate in one or both Frequency Response markets, depending on the ability of their equipment to respond.

  1. To participate in the ‘Fast Reserves’ market customers’ equipment needs to respond within 1 second and reduce load for up to a minute.
  2. In the ‘Sustained Reserves’ market equipment needs to respond as close to 1 second as possible and reduce load for up to 30 minutes.

We continuously monitor our customers’ participating load, so that we can let Transpower know how much combined load is available to respond. If an unplanned major grid event occurs, which is around once a year, we automatically reduce load to help rebalance supply and demand on the grid.

Demand Response

‘Demand Response’ involves scheduling equipment in advance to reduce load. This could be to support Transpower (in its role as high voltage grid operator) reduce demand when there are capacity constraints on part of the grid, or to minimise the amount of thermal generation that needs to be supplied to the wholesale electricity market.

These events typically occur when electricity demand is high, e.g., between 5pm and 7pm on a cold winter evening when everyone’s at home using appliances like ovens, heat pumps and hot water cylinders.

Events range in duration from 1 to 2 hours and can occur anywhere from 0 to 10 times a year depending on the location of the network and wholesale market conditions, such as rainfall and wind. As with Frequency Response, we pay customers to participate.

Sound interesting?

If you’d like to learn more, feel free to give me a call on 027 206 4676. You can also hear what our customers are saying here and read about how we’re expanding our programme here.