NREL report highlights how electrification increases the need for demand flexibility

Demand-side flexibility can support widespread electrification and a renewables-based power grid by providing operating reserves throughout the year thus reducing the need for natural gas plants and energy storage to fill in demand gaps, according to a new report from the National Renewable Energy Laboratory (NREL).

Increasing demand-side flexibility reduces the number of low-load hours for fossil fuel generators and reduces the number of starts and shutdowns of natural gas generators, resulting in up to $10 billion in annual operating cost savings in scenarios with the greatest demand-side flexibility, according to the report, Operational Analysis of U.S. Power Systems with Increased Electrification and Demand-Side Flexibility.

The report is the sixth and final in NREL’s Electrification Futures Study (EFS) that was launched in 2017 to explore the potential impacts of widespread electrification in all U.S. economic sectors.

The EFS researchers found that demand-side flexibility—mainly from optimized vehicle charging and flexible operations of end-use equipment in buildings and industry—can alleviate the challenges of operating a highly electrified power system with high levels of variable renewable generation.

Shifting load to align with wind and solar generation reduces the risks of unserved energy and the curtailment of renewable resources, NREL said, adding that the complementary relationship between flexible electric vehicle charging and solar generation is particularly pronounced.

In modeled scenarios with high electrification and high variable renewables, demand-side flexibility can lower annual carbon dioxide (CO2) emissions by 8.3% by enabling greater utilization of renewable energy and avoiding fossil fuel consumption, the studies found.

For the EFS project, NREL analysts ran simulations of the national power system, using hourly operations, operational costs, and emissions to study the interactions between different levels of electrification, demand-side flexibility, and renewable energy deployment.

The analysts examined hourly power system operation without demand-side flexibility to test whether electrification — and associated changes in annual energy demand, hourly demand, operating reserve requirements, and the capacity mix — affects the grid’s ability to serve load or operating reserves.

The simulations showed the future power systems envisioned in the EFS can serve nearly 100% of load and 100% of operating reserves with no demand-side flexibility, but energy storage would be critical to balance load and provide operating reserves. Expanded power transfer capability across regions would also be needed to meet increased electrified demand.

The results showed “the importance of all sources of grid flexibility — including transmission and inter-regional power transfers, flexible generation, storage, and demand-side sources of flexibility — will likely be important for operating a power system with high electrification and high renewable energy deployment,” Trieu Mai, NREL analyst and EFS principal investigator, said in a statement.

In the final EFS report, NREL analysts examined how flexible loads change system operations with electrification.

They found that by shifting the timing of electricity demand, demand-side flexibility can provide operating reserves throughout the year, reducing the need for other generation sources such as natural gas plants and energy storage.

“Ultimately, the analysis highlights the value of increased integration and coordination of demand- and supply-side resources in future electric system planning and operations—particularly under high electrification futures,” Ella Zhou, NREL analyst and lead author of the final report, said in a statement.

The NREL analysts also noted that additional research is needed on flexible load operation, cost, and value across a wide range of subsectors and end uses, including assessments of grid reliability in a highly electrified system.

NREL has scheduled a June 17 webinar to discuss the findings of its EFS project and the need for further study.