What is Grid Stress and How Can You Alleviate It?

Understanding Grid Stress

Before we delve into demand response, it is important to understand the concept of grid stress. Grid stress can be explained through the dynamics of supply and demand. Energy consumers create demand for energy through their use of electrical appliances such as lighting, HVAC, refrigeration, and more. Grid operators, meanwhile, provide a supply of energy through generation resources such as power plants, solar farms, etc. 

Grid stress refers to any scenario where the demand for energy, driven by utility customers, puts strain on the supply of energy available from the grid. Left unchecked, grid stress can lead to large-scale power outages that leave whole regions without energy, which creates significant economic and public health crises. 

Peaker Plants - An Imperfect Solution

Given the potentially dire consequences of grid stress, operators have taken a number of steps to safeguard against large-scale outages. One such tactic can be seen in the use of peaker plants, which are power plants that run on an ad hoc basis when demand for energy exceeds supply. 

Unfortunately, peaker plants wreak havoc on the environment since they are designed to power on quickly to meet real-time energy demand, making them extremely inefficient. To illustrate this, consider that it takes 50% more natural gas to run inefficient, gas turbine peaker plants compared to cleaner combined cycle plants. The negative environmental impact of peaker plants is further appreciated by the finding that in New York City alone, peaker plants emit almost 2.7M tons of CO2 annually. 

In addition to environmental harm, the use of peaker plants also threatens the health of communities that live in close proximity to them. Peaker plants emit hazardous pollutants like sulfur dioxide (SO2), nitrogen dioxide (NOX) and particulate matter (PM2.5) that increase risks for cancer, heart disease, asthma, birth defects and damage to the brain and nervous system. 

It is therefore clear that peaker plants’ ability to generate ad hoc power comes at significant costs for the environment and public health. This highlights the need to develop alternative strategies that focus on reducing demand for energy rather than endlessly increasing supply.        

Making the Grid More Sustainable by Reducing Demand

In light of the negative outcomes of peaker plants, grid operators have created various programs that aim to alleviate grid stress by reducing demand itself. Two significant examples of this are time-of-use (TOU) metering and demand response (DR).

Energy Consumption Measuring Methods: Time-of-Use (TOU) Metering and Demand Response (DR)

TOU metering is a method of measuring and charging a utility customer's energy consumption based on when the energy is used. Utility companies charge more during the time of day when electricity use is higher. The period when electricity is most expensive is called “peak pricing” while all other ours are considered “off-peak.” Some utilities also offer “partial peak,” which falls between peak and off-peak, and “super off peak,” which is even cheaper than standard off-peak. By charging customers on a TOU basis, utility companies create an incentive for customers to consume more energy when the grid is least strained and less energy when the grid is most stressed. This demonstrates how TOU metering helps reduce energy demand itself.  

Another tactic employed by grid operators is demand response (DR). DR programs are offered by many utilities for energy consumers to enroll in and receive money back for reducing their energy demand, at the utility’s request, during peak periods of demand and under-supply. 

A typical DR program functions like this:

1. A participant commits to curtailing a specific amount of energy, measured in kW, when dispatched by their utility - this is known as the participant’s nomination.
2. Then, when the grid experiences stress, utilities dispatch participants to curtail energy, thereby reducing demand.
3. Participants are paid by utilities both for participating in the program and for reducing energy when needed, showing how DR programs are a win-win for utilities and their customers.

TOU metering and DR programs are innovative methods of responding to grid stress without the use of peaker plants or other expensive, inefficient assets to quickly generate more energy.    

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