Demand management. Here and now. Santi Martinez, May 2021

I’m sure my grandfather found it dizzying to go from having electricity in the village in 1921, to having a TV, in a bar five kilometers away, in just fifty years.

Evolution takes place in sections that looking back seem long and stable, but looking under our feet give the feeling of continuous movement with a tendency to geometric growth in a system where entropy reigns.

If we approach our days, in 1980 digital meters began to be used in order to simplify the process of reading meters, and in the 2000s the first major deployment of meters, called intelligent, in Italy was made. The data was beginning to be important for the electricity sector. Forty years have passed, and data and metadata have gained relevance, going from optimizing the operations of electricity companies, to providing information to users about their consumption pattern and how to optimize their energy cost, relying on Artificial Intelligence systems.

In 100 years, having electricity supply has gone from being a luxury to a basic service, while information about energy flows has stolen the limelight.

We have fast, robust and cheap telecommunications, value-added services in the cloud, artificial intelligence and technologies developed in the last decade, whose convergence allows us to affirm that, in case of an impact on the electricity grid, it is as safe to start up a generation plant as to reduce demand.

The quality of service of the electricity system, in developed countries, is very high. In the analog world, this is achieved thanks to the availability of power plants that are stopped or operating at low performance, which represent an important fixed cost for the system, since they are only activated when the system manager identifies a supply problem in some geographical area. In the digital world you can have the same quality of service, but with variable costs, activating demand management only when the system requires it, without this representing the maintenance of large infrastructures.

For this to be possible, a change of role must take place on the part of companies, in the sense of moving from being simple consumers to actors in the system, providing flexibility services for which they will receive significant economic compensation.

The simplest case to manage and explain is that of industrial cold. A company that has refrigerators in continuous operation can offer, in certain time slots, that the compressors be stopped, or that they reduce their activity, because if the insulation is correct that change will not affect the content of the refrigerators. For the purposes of demand management, there will be a reduction in consumption, as these systems are called flexible.

In a situation of generation problems or technical restrictions, the system manager, or the distributor in the area, can ask that demand management services be activated, reducing consumption to compensate for a lack of generation, and they will do so by offering a high price for that solution because, we insist, it is a variable cost that avoids the creation of infrastructures that have to be maintained 365 days a year.

We need renewable generation to increase to meet the challenge posed by global warming, but we must not forget that it is a type of intermittent generation and difficult prediction, so it is essential that we are able to manage demand in significant volumes to have a stable system.

The energy system, and the electrical system in particular, have shown little skill or willingness to communicate and transparency with their customers, and now it needs them.

The European Commission demands to put citizenship at the center of the electricity system, and it will be essential to find communicative and remuneration strategies that seduce them.

It is time to advance in the management of the flexibility potential of companies, always being attentive to the appearance of the following technology, which will appear….. tomorrow
We are doing pilots, at no cost to those interested, to assess the flexibility potential of companies and bring it to market by the end of 2021. We would like to talk to you!

Santi Martinez Farrero
Managing Director of KM0 Energy

Company Member of the Private Company and Climate Foundation