In the US, rural utilities can benefit from a centralised demand management hub to improve operational efficiency, finds a new report – Greater than the Sum: Trends in Centralised Demand Management for G&Ts – produced by National Rural Telecommunications Cooperative (NRTC) representing 1,500 rural utilities and energy software company OATI.
This study finds that because of the independent and decentralized nature of distribution co-ops, rural utilities often have different communications infrastructures, data management practices, and a variety of distinct legacy systems. While giving freedom of choice, this can lead to operational inefficiencies, such as data replication, and an inability to consistently and effectively measure and verify demand management results. These inefficiencies can keep generation and transmission (G&Ts) utilities from fully leveraging the resources of their member cooperatives.
The report finds three main trends that are driving the development of effective demand management strategies within rural generation and transmission utilities:
Trend one: Leveraging new technologies
Smart meters and advanced two-way communication infrastructure deployments are becoming more prevalent, and co-ops actually lead the nation in the use of advanced metering infrastructure (AMI) technologies, says the research. AMI and other new technologies provide enhanced observability in primary and secondary distribution grids like never before.
A robust centralized demand management platform becomes a hub from which both G&Ts and their member co-ops can manage all demand response and/or load control initiatives. Individual co-ops manage their own data, programs, assets, and customers, using the centralized database that is transparent to G&Ts.
To be effective, centralized systems must include an integration layer for seamlessly connecting with third-party and legacy systems. This integration ensures that co-ops will not be forced to adopt a single, required telecom standard or lose their freedom of choice. Instead, a centralized demand management system works with each member co-op’s unique communications infrastructure, connecting to whatever CIS, MDM, SCADA, and AMI they are using. This allows the maximum independence for each member co-op. Demand management — for both C&I and residential end-use customers — then becomes one more tool in the G&T’s power system operations toolkit.
Trend two: Wholesale demand response
Federal Energy Regulatory Commission (FERC) has issued a number of orders designed to make better use of demand-side resources, creating opportunities for new types of services that can be supplied by demand response and distributed energy resources such as ramping, load following and balancing energy.
These services create new revenue streams for utilities and also provide benefits to end-use consumers.
With the networked communications and smart technologies suggested in trend one, these new services can be created in a cost-effective manner, while significantly improving the reliability, dispatchability, and accurate forecasting of resources available from distribution and the retail side of the business.
So how do these initiatives improve a utility’s bottom line? The report gives the example of a co-op with 5MW of solar PV generation. On a cloudy day with high loads, instead of having to rely on the G&T to make up a 3MW shortfall the clouds caused, what would happen if the co-op could use DR from aggregated residential water heaters to make up the difference in the variable generation?
In a situation like this, the G&T would save, on average, US$2,000 per event compared to buying that power from the market or starting up a peaker plant. Because that’s likely to happen several times a week at a minimum, the utility will net an average annual savings of $300K, and a 10-year Net Present Value (NPV) of US$2.5M. These figures represent not just the cost of the ancillary services, but also the savings that come from reduced transmission charges. These numbers are conservative, to be sure, and G&Ts will almost certainly be able to gain significantly more value across their service territories, given the resources available within their member co-ops.
Trend three: Hosted software solutions
To implement new technologies, utilities are becoming more comfortable with using hosted software solutions, says the report authors but recommends for the highest reliability, electric utilities should look for hosted solutions that function on ‘active-active’ architecture. This means that geographically diverse data centres are able to dynamically balance server load and ensure full redundancy. If anything should happen to one of the data centres, another one can immediately support all of the data and server traffic, with no downtime or loss of data.