D-1 versus D+4

Currently ‘Synergy Service’ publishes the planned electricity price for the following day. This is called the D-1 price. Four days after the trading day, the final market price is settled. This price is called the D+4 price and it is the price used to settle trades among the players in the electricity pool. It is interesting to see how close plan and actual turn out to be. If the D+4 (actual) turns out to be significantly different from the D-1 (plan) then the wrong price signals are being sent by Synergy Service and the optimal demand response (DR) will not be achieved by the Synergy Modules using Synergy Service.

The following chart from Synergy Data shows two days from last week. D-1 (plan) is shown as a solid bar chart and the settled D+4 (actual) price is drawn as a line graph. It is clear that for most of the time D+4 and D-1 are very close. An electricity cost reduction algorithm based on D-1 would yield good cost optimisation. However at around 9:00pm, for about 1 hour, the cost of electricity deviated significantly from D-1.

 

What we are now focussed on, at Synergy Module, is trying to find some way to improve our Synergy Service signals to bring them closer to the eventual D+4. Obviously, this will reduce the cost of electricity for our customers by enabling them avoid usage during such a peak. Reducing usage at that time will lower the peak and bring down the cost of electricity for all users.

Environmentally-friendly ideas

Here at Synergy Module, we are always looking for good ideas to help the environment. And one good idea that’s come across my desk recently is the building of a DIY home solar panel system by Greg Seaman in the US, who has set one up on his off-the-Grid home. Greg has found that his small system can power all his internet needs (with a router and aerial for wireless broadband), a electric refrigerator (the size of a chest freezer!), a sound system which he can also use to charge mobile devices, battery-powered power tools, and the system even has enough left in it to run a laptop all day. Obviously the great thing about this project is that all of these electrical devices are essentially powered by free energy that did not require any burning of fossil fuels nor release of greenhouse gases into the already over-burdened atmosphere. But other appealing things about the project is that the whole system was built for less than US $1000 or UK £750, is maintenance-free (so far for several years), and the whole system is tucked neatly away out of sight so that it’s not even a blight on the beautiful surrounding countryside.
So what do you need to build one for yourself? Well, I’ll leave the detailed explanations of the actual build to Greg at eartheasy.com, but to give you a quick starter, the main components needed to build a similar system are listed below:

  • Solar panel
  • Charge controller
  • Battery bank
  • Inverter

Of course, you are going to need an array of tools and accessories as well to actually build and fit the system. Some of these tools & accessories you might already have but if not, you will almost certainly have to acquire them. For tools you don’t already have, if you are like me, then you are going to need to do a little research on the right ones to get (which is easily done these days with all the information freely available on the internet). If you are the DIY-type of person, then you know that you are going to make use of building tools in countless other ways over your life time (and that of your kids probably), so it often worth buying the best up front (in my opinion). In any case, below is a list of recommended tools that you should have if you are going to attempt Greg’s home DIY solar panel build:
– power drill and power screwdriver (or drill-driver): probably the most important tool that you will need as you will need to drill lots of holes and use a plethora of screws for the project – read up on local power drill-drivers here.
– power jigsaw: great for all general purpose sawing of several diifferent materials – read some local jigsaw reviews here.
– wiring: needed for wiring between every component in the solar panel system as well as connecting electrical equipment either permanently (like Greg’s fridge) or via wired in power sockets – best value place for wiring in the UK is Toolstation.
– wire cutters and wire strippers: you will be working almost exclusively with electrical wire – for information of which one is the best see here.

SuperGrids

Deeper penetration of renewables onto the electical grid is facilitated by linking regional grids using high voltage interconnects. I am a supported of TREC as you will see from previous posts. I found the following proposal on www.airtricity.com

 

These interconnects act both as a way of landing electrical energy from offshore wind farms as well as interconnecting the grids on both sides of the link. Full details are available on:-

SuperGrid

DR is the enabling technology…

I have huge respect for Dr. Eddie O Connor but I think he is missing the need for Demand Response. DR is a vital requirement for deep renewable penetration as well as large super grids. I just listened to his address at ASPO-Ireland. He explained that if a wind based grid was large enough then production would be level. Even if this is true, demand is not flat.

I understand that Ireland wants to have 33% renewables by 2025. Since wind farms yield 30% of rated output this means that we will have 110% installed plant versus our average consumption. Given that currently the consumption variation from minimum to maximum is nearly 200% this means that at certain times we will be generating, from wind alone, 146% of our demand. Clearly that will result in large periods of wind farm curtailment.

 As far as I know curtailment was planned to start from this summer for wind farms and we are only on 9% renewables at the moment.

If we are indeed peaking on fossil fuels then 33% renewables is not a destination. It is part of the journey. We need to get to a market of renewables plus nuclear eventually. Even if we have large interconnects from Africa to Iceland we need huge amounts of DR to make this possible.

The electrical grid system has evolved over the last 100 years as a flexible supply designed to meet inflexible but fairly predictable demand. Complicated trading systems have evolved to meet the needs of this flexible supply / inflexible demand market. DR is seen as an ‘ancillary service’. It allows for margins of error or enables peak shaving. However most users continue to use electricity on a single tariff and care little about DR. What if the grid, as we know it, didn’t exist? What if it was being developed from scratch now and the only sources of power were solar, wind, hydro, tidal and wave? This would be described as inflexible supply and demand would have to respond to the variability in supply. In order for this grid to be stable there would have to be huge demand response capability built in. You cannot have inflexible supply and inflexible demand.

To my way of thinking the solution is to have realtime pricing on electricity. It may be necessary to let the price of electricity go near zero or even negative at some times to stimulate new markets such as resistive heating and H2 production. Resistive heating as a way of replacing fossil fuel consuption is far better from a carbon perspective than curtailing the wind farms. An obvious market would be municipal swimming pools and public buildings.

Variable pricing will create new markets for low cost electricity and will create both new generation at high cost times (ie CHP or embedded diesel generation) as well as devices that can load shift (ie HVAC and refrigeration).

It is therefore my thesis that DR based on real time pricing is the enabling technology required to move us to a renewables future.

Synergy Data Released

This week, a number of very large companies have started to use Synergy Data to analyse and manage their consumption of electricity. The software enables them negotiate more effectively with suppliers to secure better pricing. Users can form an opinion as to how their usage pattern affects their pricing and can establish how much ‘profit’ their suppliers make versus the SMP tariff.

If your company could benefit from the use of energy management software, send me an email requesting a free online account.

Synergy Data in Beta

A beta copy of the Synergy Data application is now online and can be accessed with the following credentials. It is incomplete and buggy but it works. Thanks Jason, well done!

http://84.202.14.111/
user: [email protected]
pass: jsmith

Almost every day, a new update will be deployed so check back frequently.

www.synergymodule.com will shortly be changing from a blog to a commercial Website. But don’t worry, the blog will still be accessible from the menus of the Website. The following graphic is a designer’s idea of what the new Website will look like.

 

The DR Group

Over the past few months a growing group of parties interesed in DR have started to communicate. We had a teleconference a while back and a meeting is proposed in Tallagh at 11:00am on 28th August, 2008. The text of an email circulated to confirm the time and venue is below. As I havn’t permission to publish names the persons names in the text below are covered in Xs. If anyone else wants to attend they will be more than welcome to do so.

______________________

Dear All,

Everyone that replied is available to meet on 28th August 2008 in Dublin. 11:00am has been suggested to allow those travelling from Belfast and Cork to arrive. The response and enthusiasm has been exceptional with many people coming from Belfast, one from England, and of course XXX XXXXX and I will be representing Cork. It seems like there are quite a few closet DR fans.

XXXX XXXXX has kindly booked a room for us at the Synergy Centre in Tallagh. This is on the campus of the Institute of Technology, Tallagh (ITT). A map is available on the following web page.

http://www.wirelitesensors.com/index_files/page435.asp

I am still working at engaging the parties to the Smart Metering project. It would be great if we could get a representative to attend. I will follow up with XXXX XXXXX of CER and XXXXX XXXXXXX of SEI prior to the meeting to see if they want to be represented. If anyone can suggest a Smart Metering contact at ESBN I would appreciate same. I see DR and Smart metering as mutually enabling technologies.

Although not for this upcoming meeting we need to engage the Suppliers also. If anyone has a good contact list (XXX XXXXX??) of suppliers they might circulate an email letting them know that the group exists and asking for their involvement. Suppliers may be interested in DSU projects or might be interested in real time pass through tariffs (ie like PPPT) that reduce their need for hedging. The suppliers buy energy on an SMP that varies by 300% on a typical day and it is often much more yet almost every consumer sees electricity as having a constant price.

Private investment of around €5 Billion is expected in Wind Energy through Gate 3. Curtailment policies, if implemented will cripple this investment opportunity. A key objectives of DR is to facilitate deeper renewables penetration. XXX XXXX has asked IWEA for an opportunity to allow a presentation from our Group to speak at their next conference in The Europa Hotel, Belfast on Friday 3rd October. Andy Frew suggested that we pre arrange future DR Group meetings, one in advance. I would therefore like to suggest the possibility of having the second next meeting of the DR Group on the morning of 4th October in Belfast. Perhaps we could discuss this at the meeting 28th. Will the Suppliers have representatives at the IWEA conference?

We need to bring CHP investors into the discussions on DR also. Demand for hot water and peak loads coinside. CHP generators should use the same technology as DR and react in real time to real time pricing. CHP vendors are telling me they are ham strung by not being able to export surplus energy (at peak times).

Peak Oil has probably occurred and peak gas cannot be that far away. Therefore we must move from a pure flexible supply / inflexible demand model to a more inflexible supply / flexible demand model for electricity supply. The importance of DR and Smart Metering will become vital in this paradigm shift. We will have to add a layer of realtime supply and demand based on realtime pricing signals on top of the existing D-1 planning processes outlined in the current Trading and Settlement Code. (An english translation of the Latin text is due for release soon. It took 1600 years to translate the Bible so thats not bad :-)

As a final point, I am hugely interested in the concept of TREC (www.desertec.org). Brown, Merkel and Sarkozy are now pushing this plan as was in the news recently. If Europe is linked via the UK into a high voltage DC network then we could in theory become a net exporter of energy especially as night when the solar plants on the south of Europe are off and our loads are at their lowest. I have personally offered my services to TREC to promote their plan in the Irish context if they wish me to do so. As well as securing our energy future this plan has the opportunity of delivering peace in the Middle East and offering income to northern Africa. This plan is proposing 20GW by 2020 and 400GW by 2050. Brown recently said the ‘North Sea could be the new Gulf in terms of its potential to generate wind energy’. This island wants a slice of that action too. Did you know that Middle East sovereign wealth funds are lined up to invest in projects like TREC. Credit crunch me @r53!

The difficulties are not technical they are educational. I would like to see the DR Group contract with a media presenter such as David McWilliams or Duncan Stewart to develop a TV documentary on the global energy changes occurring and what our strategy as an island is, and should be, to meet those challenges. My biggest fear is that the Irish energy debate shrinks down to one of whether we should have a Nuclear Power plant or not. That question is irrelevant. We don’t have a competitive advantage in nuclear technology or production. We have the best wind sites in the world. We should lead the world in renewables. And we should lead the world in the export of Smart Grid and DR technology. I told Enterprise Ireland this, so I did. Didn’t I, XXXXXXX.

I am on holiday this coming week. No international flights, you will be glad to hear. Just a tour of the Antrim coast in a fuel efficient Prius. I will respond to any emails after the 27th July.

See you all soon!

Jerry Smoothie

Synergy Module

www.synergymodule.com

021 4854234

087 6681635

Time to invest in wind!

On June 8th 2007, Eirgrid published a paper on wind energy cost implications. See my blog, on 14th June 2007, for details and for correspondence I had with them regarding the, in my opinion, very optimistic price projections for gas. In essence that paper seemed to me to suggest that wind wasn’t fully economical unless gas reached €0.80/therm and the projections suggested that might never happen or if it did it might be after 2020.

 

A year ago I was confused that no account for risks associated with peak oil or peak gas were factored into the plans. So what happened?

 

Gas prices now are €0.20/therm higher than they were expected to be in 2026. Is there anyone on the planet that believes gas prices will fall by 30% between now and 2026? If there is I’d like to share their medication.