Interesting demand response

"Demand response" is, properly, paying big users to stop using electricity at times when demand exceeds capacity.  It is not the same thing as "load shedding" (alias "blackouts") which is from the point of view of consumers involuntary and affects everyone within the area served by a single (or several) electricity substation(s).  What's being talked about in this article from CleanTechnica is not strictly demand response, but is something akin to it.  And very clever it is too.

Hawaiian Electric (HECO) recently added 2.5MW of grid services to its grid, allowing it to store energy during peak solar and wind production periods, and did so without any traditional batteries, flywheels, or pumped hydro. Even better, the hardware required is very minimal, and in fact, most of it already exists in every residential grid in the world.

Demand response grid services are important because the times when renewable energy is flowing do not always match up with when people are using electricity. In the below graph, you can see that if we can shift the energy use from the peak demand time (red) to times when peak renewable generation is happening (yellow), you can use more clean energy. Pretty simple, right? As always, the devil’s in the details.

Hawaii’s startup ecosystem is not well known, but the confluence of high costs (of everything), being 3000 miles from the nearest landmass, and a steady influx of capital from military and tourism create an interesting space for innovation. Given that Hawaii, like many islands, is largely powered by diesel generators, the cost of electricity is insanely high, making Hawaii a great laboratory for cleantech startups.

One of these startups, Shifted Energy, a developer of software and controllers that retrofit electric water heaters, has partnered with Open Access Technology International (OATI) to outfit up to 2,400 water heaters with smart controls through Hawaiian Electric’s Grid Services Purchase Agreement. Shifted Energy installs controllers on residential water heaters to allow utilities to effectively use them as batteries. The company will deploy a 2.5 megawatt storage system for HECO, the company announced last week, creating what’s often referred to as a virtual power plant, or VPP.

“The controllers are free to participants and property managers,” says founder and CTO Olin Lagon, “and participants in this Hawaii program will receive a monthly bill credit between $3 and $5, depending on how often their heater has the ability to contribute to the program. But, more importantly to us, a lot of people are renters, multi-family apartment dwellers, or can’t afford solar panels, batteries, or other clean energy technologies. Our technology empowers everyone with an electric water heater to participate in the fight against climate change and the transition to cleaner energy.”

The company has spent years optimizing an algorithm that takes into account typical hot water usage, so as to maximize the positive outcome and still supply hot water when needed. Here in Hawaii, peak demand time (about 5–9 PM on weekdays) is a time when the grid is strained, and when the most dirty energy is being used. So, by shifting the time a water heater kicks on and warms up to times when there is excess solar on the grid, the technology can help reduce the peak demand, and therefore, the amount of dirty, expensive energy that is used during that time.