A rethink on handling power resources

China generated more than 40 percent of all newly added renewable energy worldwide in the past five years, while its investment in clean energy surpassed the combined total of Europe and the United States, according to the magazine Renewable Energy World. Now the country is looking for new ways of managing power.

"As the penetration of renewables increases to meet climate targets, the problem of how to cope with intermittency - the periods when the sun doesn't shine or the wind isn't blowing - is becoming increasingly acute, so demand-side management is a big part of the solution," says Neil Hirst, senior policy fellow for climate change and the environment at Grantham Institute, Imperial College London.

Demand-side management is the modification of consumer demand for energy through various methods, such as financial incentives and education.

To reduce peak load, and balance electricity supply and demand, China has long been trying to get consumers to change their ways.

Broad demand-side management concepts were first introduced in China in the 1990s but only started to take off after the release of the 2011 Demand-side Management Rule, according to the Paulson Institute, a think tank founded by former US Treasury Secretary Henry Paulson.

"China has historically managed periods of excess peak demand through an administrative system of demand planning and rationing," says Fredrich Kahrl, managing consultant at Energy and Environmental Economics Inc.

However, to better manage such practices, the National Development and Reform Commission issued measures in April 2011 that specified that load shifting and peak load reduction should be given priority before limiting or cutting power to consumers.

The early 2000s saw widespread peak power shortages and load shedding in key manufacturing areas, and demand-side management provided a solution to offset peak demand, leading to the birth of efficient power plant pilots in Jiangsu, Guangdong and Hebei provinces, says the Paulson Institute.

The policy developments in 2011 paved the way for further pilot programs in July 2012 by the Ministry of Finance and the NDRC. Despite recent progress, the Paulson Institute says demand-side management as a whole, and demand response in particular, are still at a nascent stage.

Yet technological advances have enabled demand response to move beyond traditional load management programs. Actility is a French tech company that has managed to create a flexible mechanism to increase or decrease electricity consumption to relieve the state grid.

Renewables are not easily controlled, as wind strength can fall and solar power may increase in some regions, says Olivier Hersent, CEO of Actility.

"There's a huge issue in Europe on how the grid is going to be balanced. There is no easy energy storage in the grid so that you cannot just store wind power in the battery and then release it later," he says.

Actility has developed an optimal control automation tool that takes into account the specific requirements of water distribution companies.

"The volatility of the real-time electricity price is very high, so what we do with this water management system is that the computer automatically buys and sells energy," Hersent says. "Whenever the price goes negative or cheap, we fill up the tanks as much as we want. When the grid is short of energy, we curtail pumping on-site and sell the unconsumed electricity to the grid."

In China, a lot of wind energy capacity is not being used, and Hirst says it is essential to take advantage of the lower variable costs and better environmental performance of renewables.

"I expect demand-side management - in terms of incentives for domestic and industrial consumers to adapt their patterns of demand - will play an important part," he adds.

wangmingjie@mail.chinadailyuk.com

(China Daily European Weekly 03/11/2016 page29)