In our recent series on the negawatt we talked about how automated appliances and devices in the home can also save people money through energy conservation. We also talked about how there is even greater value in bundling people’s devices together to have them reduce energy consumption in concert. This bundling is known as “aggregation.”
We have received some questions about how this idea of aggregation works in relation to the negawatt in particular. But also, while it may be apparent why aggregation is beneficial for the energy industry, the question “why is this valuable to the household?” is less immediately tangible. These questions are related, so we’re going to have a crack at responding to them here.
This post (Part 1) outlines what aggregation is and how it works with negawatts. In Part 2 we take a look at the value of aggregation for energy citizens.
What is aggregation?
First, let’s turn our attention to aggregation. This idea is easier to explain in relation to electricity generation as a first step.
In the past, we’ve (collectively) built a single, very large centralised power station to produce energy, usually on the megawatt scale. Watts are a measure of power, like you see on your light bulb packets — a kilowatt (kW) is 1,000 watts or 100 x 10 watt light bulbs and a megawatt (MW) is 1,000 kilowatts or 1 million watts. This is the sort of scale we need to be able to support our society’s energy use — for example, in our towns and cities.
A typical household rooftop solar installation is less than 10 kilowatts (kW). For example, a member of my family has a 3 kilowatt solar system, which has the potential to produce around 3 kW of power (i.e. at maximum capacity in the middle of the day with no shading etc.) Under a net metering arrangement, the energy produced by these panels is used first in the home with any excess energy sent out to the grid, or “exported.” So the amount of energy exported is usually a fair amount less than the capacity of solar system itself. Let’s use an example: let’s say a 3 kW system exports about 30% of the power it generates. This would result in 1 kW (which is a nice round number to work with) being exported at a point in time.
If we bundle enough of these rooftop solar systems together and count how much power they produce collectively, we can see we’d be producing enough energy to reach a megawatt’s worth. Let’s say we have 1,000 homes that match this description, the overall generation exported is equivalent to a 1 megawatt power plant.
Given that nearly 25% of Australian households have installed solar on their roofs, we now have a considerable amount of capacity behind the meter. Rooftop solar recently exceeded the 5 gigawatt mark, which adds up to more than all of the generation of the Snowy Hydro Scheme — so in aggregate it’s a lot!
The importance of “dispatchable” resources
With a traditional power station, the power companies can control how much and when energy they generate is put out to the grid, which is orchestrated by the Australian Energy Market Operator (AEMO). This energy is “dispatchable,” a bit like the throttle you use to control your car. But with solar and other “intermittent” sources (like wind), we can’t really choose when the energy is generated — it’s dependent on when the sun is shining. Grid-scale battery technology like that being installed in South Australia is one solution to this, as is the proposed “pumped hydro” facility that the Government is looking at.
But, as we’ve suggested previously, in many ways these two examples are just like the old days in power generation from a big, single source. With the rapid uptake (and projected cost reductions) of home-scale batteries couldn’t we apply the same principle?
The answer is yes: we can use lots of smaller batteries to soak up the excess energy when it’s generated but not as valuable (i.e. when demand on the network is low) and then control when it goes out to the grid at times when it is most valuable (in daily peaks for example, or when the sun isn’t shining). As before, let’s assume a battery can export 1 kW when it’s needed and we have some way to orchestrate when that happens. If we put enough of them together at the same time we can achieve 1 MW of generation but, importantly, this can be done “on demand.” This is how new services like Reposit’s “Grid Credits” work. So while the principle is the same as “fixed” generation, the fact that when the energy is exported can be decided is beneficial. This type of arrangement is sometimes called a “Virtual Power Plant.”)
How does this work with negawatts?
Hopefully with that explanation it’s not hard to see how this works in relation to generation. But what about when we think about negawatts?
In the second post of our series on the negawatt we outlined how a significant reduction in usage (at the network level) can have similar outcome to increasing generation. That is, instead of increasing generation by creating another 1 kilowatt of power to meet demand, we can reduce demand by 1 kilowatt to achieve the same effect.
Typically this is done with larger single loads — for example industrial equipment. Could we achieve the same effect by bundling together lots of smaller loads, like pool pumps and air conditioners, in the same way as we’ve outlined above?
Again, the answer is yes: the effect is the same. While on an individual household level the change is pretty small, if we bundle enough of these appliances together and have them respond in unison we can achieve big results.
For example, let’s say we turn down a 2 kW air conditioner for a short period to half its maximum demand (so, again, 1 kW). If 1,000 households did that at the same time it would be the same as adding 1 megawatt of power from a power station, or from batteries, to the grid.
In reality, it would be best if all of these different resources — generation, batteries, automated appliances — worked in concert to achieve a specific outcome.
Why? Because aggregating across different types of devices and a mix of megawatts + negawatts is more cost effective and increases the amount of effective generation that is available to respond to the needs of the system.
This is all great for the system, but what about the people that own all those resources—what’s in it for them? I’m glad you asked—we’ll be covering that in our next instalment… ;)
Posted by Grant Young, Chief Experience Officer (CXO) of Nexergy.
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