PISET: Assessing the Environmental Impacts of Providing Power System Reserves with Demand Response and Distributed Energy Storage

Start Date: 
Jul 1, 2014
End Date: 
Dec 31, 2015

Partnerships for Innovation in Sustainable Energy Technologies (PISET)

This program seeds new interdisciplinary research programs in sustainable energy science, technology, and policy with funding for a University of Michigan Sustainable Energy Research Fellow. Successful proposals will combine innovative research plans with concrete timelines for establishing independent funding.

Assessing the Environmental Impacts of Providing Power System Reserves with Demand Response and Distributed Energy Storage


Renewable portfolio standards and other measures to reduce the environmental impact of the electric grid have led to an increase in the amount of intermittent and uncertain power generation, primarily from wind power plants and solar photovoltaics. Unlike conventional generators, these new generators are nondispatchable; they produce when the wind is blowing or the sun is shining. Conventional generators are scheduled day-ahead to cover the difference between the forecasted load and the forecasted renewable production. To maintain reliable operation of the grid, conventional generators also provide “reserves” by holding back some capacity so that they can balance real-time demand-supply imbalances. As more wind and solar capacity is added to the system, more reserves will be needed [1,2].

Providing reserves with conventional generators carries with it environmental burdens. When fossil fuel plants operate at partial capacity, they are less efficient, combusting more fuel and producing more CO2, NOx, and SOx for every kWh produced [3]. Moreover, as plants ramp up and down to meet the dynamic needs of the system they emit more NOx and SOx than when operating at a constant output [4]. In addition, higher penetrations of variable renewables lead to an increase in on-off cycling of conventional generators, resulting in a increase in the consumption of start-up fuel and a decrease in the effectiveness of certain environmental control technologies [5].

Demand response (DR) and distributed energy storage (DES) can also provide reserves to power systems. In DR programs, flexible electric loads such as heating/cooling systems and industrial process loads are incentivized to decrease or increase their power consumption from desired levels when renewable production levels and/or electric load power consumption differ from forecasted values [6-9]. Likewise, distributed stationary and mobile storage devices (e.g., vehicle batteries) can be incentivized to consume/produce electric power when it is needed [10,11]. A large aggregation of coordinated DR and DES resources can provide demand-supply balancing on timescales of seconds to hours. In some cases, the technical capacities of DR and DES resources exceed that of conventional generators; large fossil fuel power plants take seconds to minutes to respond to control signals while DR and DES resources can respond practically instantaneously. It is also hoped that reserves from DR and DES will be less costly than those from conventional generators.

The environmental impact of replacing reserves from conventional generators with reserves from DR and DES resources has not yet been determined. While we hypothesize that this will result in a net decrease in life cycle environmental impacts, the effect of this shift is complex and system-dependent. The system’s generation mix, physical constraints, and energy/reserve market design will all affect the environmental impacts. For example, if reserves from DR and DES replace reserves from natural gas power plants, the gas plants may be less competitive in the power market resulting in more generation from coal plants.

This project will quantify the environmental impacts of using DR and DES resources to meet reserve needs in current and future power systems. Specifically, we will determine how power system dispatch changes when DR and DES provide reserves, and we will use the results within a comparative life cycle assessment (LCA). Our eventual goal is understand which power system characteristics and power market designs lead to positive or negative environmental impacts. This work will be the foundation for future projects in which we will develop strategies to improve power system dispatch by explicitly considering environmental impacts. The results of this work and future work will be useful in crafting public policy that incentivizes environmentally preferable approaches.

University of Michigan - Energy Institute
demand-supply balancing