Demand-Side Bidding and the IEA

The International Energy Association (IEA) uses two acronyms DSM and DSB which can be defined as follows:

  • Demand-side management (DSM) is the control of electrical consumption for cost and ecological reasons.
  • Demand-side bidding (DSB) is a market place that creates a financial incentive for EDM.

This web site uses the phrase energy demand management (EDM) to mean the real time control of electrical load and generation plant to stabilise an electrical grid. EDM is therefor a subset of DSM. DSB is a necessary prerequisite for the implementation of EDM.

The International Energy Association (IEA) has a web site specifically devoted to DSM ( This site has a ‘key publications’ section from which you can download a number of interesting documents. The one I found most interesting is ‘A Practical Guide to Demand-Side Bidding’. You must register to download this document so I cannot publish a URL. This document is explosive in its content and its impact for Ireland because it states that demand side bidding is important on any grid but its importance is amplified in the context of a small network with high renewable energy availability.

The document gives a seven step implementation plan to establish a demand-side bidding (DSB) programme within a country. These seven steps will drive my business model development over the next year.

  1. Identify the needs of the buyer (i.e.TSO/EirGrid)
  2. Target providers (understand electricity consumer processes)
  3. Adapt Product (match ‘needs’ ofbuyer to ‘process’ of provider)
  4. Define technologies (technical solution to control monitoring and communications)
  5. Make Business Case (Define costs and benefits)
  6. Refine selection of product (Adjust business case to find best match)
  7. Implement (Establish bid mechanism and negotiate contracts)

The Irish Electricity Market

The Electricity Supply Board (ESB) is eighty years old this year. It was founded in 1927, the same year my father was born. It is hard for me to imagine that as a young child he did not have electricity at home. Up to that point electricity was generated by city corporations for local distribution. The development of the Shannon hydroelectric scheme and the creation of the national transmission grid that resulted triggered the Irish government into forming a single state owned monopoly for electrical generation and transmission. In Ireland, electricity and the ESB became synonymous. Most people in Ireland still view this as the market situation but times have changed considerably.

The European Union (EU) directive 96/92/EC, published in 1996, required member states to open their electricity markets. From the year 2000 this directive is being gradually implemented in Ireland. The ESB lost its monopoly on electricity production and distribution in Ireland. The ESB was divided into two separate business units, ESB Generation and ESB Networks. ESB Generation now competes as any other wholesale elctricity generation company in the state. ESB Networks maintains the distribution network.

Once the ESB monopoly was broken, the Commission for Energy Regulation (CER) became the overall regulator of the Irish energy market including electricity. A new organisation EirGrid was founded to act as the  System Operator and the wholesale market operator for electricity in Ireland.

How does this new structure affect the regulation and administration of EDM projects, existing or proposed, in Ireland? Any EDM projects must be initiated and licensed by the CER and must be operated by EirGrid.

In order to facilitate wind energy penetration, EDM must be real time. The only real time EDM in Ireland is STAR and that is limited in size, is currently closed to new entrants, and is designed to assist in rare cases of generation plant failure. Obviously if I am to implement an EDM business in Ireland I will need the necessary regulatory and administrative procedures to be implemented bt CER and EirGrid. The question is therefore, how disposed to EDM are CER and EirGrid.  The following link answers that question:-

CER are planning to implement a pilot Demand Side Management (DSM) project involving smart metering and time of day tariffs. Surprisingly the discussion document in the above link does not mention wind energy at all. I think that this is because the project is in response to initiatives at a European level and it is only in the Irish context that EDM takes on a specific signifiacance in relationship to wind energy.

Also you will notice that CER use the acronym DSM while I use the acronym EDM. Do these mean the same thing? From the published literature, demand side management appears to be a very broad term that includes all kinds of energy efficiency projects at the consumer. DSM includes EDM as a subset. Energy demand mangement is specifically about the real time generation, curtailment and consumption of electricity to achieve grid stability.

Profile of an Energy Demand Management (EDM) company

EnerNOC Inc. is an excellent example of a company offering EDM services. The company is based in the USA. Each customer of EnerNOC has an EnerNOC Site Server (ESS) installed.

EDM requires measurement and control functionality at the customer site and the ESS implements this. Every ESS has a communications link back to a Network Operations Centre (NOC) that acts as a central control point. The name EnerNOC comes from a concatenation of Energy and NOC.

From the NOC, EDM can be implemented by either curtailing loads at the customer site or by starting diesel generators at the customer site. In either case load is removed from the grid, reestablishing stability.

EnerNOC is paid by the TSO for every MW of load removed from the grid. At times of grid instability the TSO is prepared to pay far more for load shedding than the normal cost of electricity. This money, paid by the TSO, is shared between EnerNOC and EnerNOCs customer.

Tim Healy is the CEO of EnerNOC. With a name like that there has got to be an Irish link there somewhere. Click on the following URL if you want to hear Tim talk some more about his company.

Imitation is the sincerest form of flattery. Ireland needs an EDM company with a business model similar to EnerNOC in order to further stabilise our grid so as to allow deeper penetration of wind power. In the Irish case we may also need to add load to the grid for stability to compensate at times that wind exceeds forecasted energy output. This could be done by using refrigeration or HVAC loads whose thermostat could be controlled. So, for example, a refrigeration plant normally run at -10C could go to -12C at times of surplus wind energy. Later when energy was scarce (and therefore more expensive) the thermostat could be reset to -10C.

It is my prime business objective to setup an Irish EDM company.

Toyota announce Plug In Hybrid!

Toyota have announced that they are road testing a plug-in version of the Prius.

This is the off peak electrical load we need to get EDM on the road (literally) in Ireland. According to the published specification, the secondary battery can store about 2.6kWh of energy. If we had 10,000 of these cars in Ireland they would consume 26MWh of off peak wind generated electricity per day. The grid stabilistion effect of this managed load would be a very positive factor in increasing wind energy penetration in Ireland.

Energy Storage

This blog is about how EDM can help the penetration of renewable energy sources into the electricity grid in Ireland. Another facilitator of renewable energy penetration is energy storage. For example, currently, there is significant interest in pumped hydro storage in Ireland. I have added the URL of the Electricity Storage Association to the blogroll of this site. This URL lists the many options for electricity storage and draws comparisons between them.

It would seem from the analysis that compressed air energy storage (CAES) is an option that might also deserve investigation in the Irish context. This technology uses underground mines or natural caverns to store large volumes of compressed air. During times of surplus electrical energy, air is pumped into the cavern. When electricity is required, the compressed air is used to improve the efficiency of a gas fired turbine.

Off the south coast of Cork in Ireland is the Kinsale gas field which is operated by Marathon. For full details read the following PDF.

The Kinsale field is now nearly spent and is being used as a natural gas storage facility. The Seven Heads gas field which extends further into the Atlantic uses the pipline and infrastructure of the Kinsale field to land the gas on shore. I began to wonder could the Kinsale gas field infrastructure be used to implement a CAES system. I decided to send the following email to Marathon’s press officers.


Dear Linda, Robert,

I would appreciate it if you could supply an answer to a technical question, please.

Question Background:  Ireland has a major problem with wind energy penetration due to the variable supply nature of wind generated electricity. Energy demand management (EDM) or energy storage, preferably both, are required to solve the problem. As I understand it, Ireland has 2GW of planning permissions for wind turbines for which grid connections are not possible for reasons of grid instability. I am interested in EDM and energy storage. While researching the technologies behind energy storage I grew a particular interest in the viability of compressed air energy storage (CAES). This form of energy storage is used in conjunction with natural gas to increase turbine efficiency. What is required is a large sealed natural cavern that can be used to store compressed air.

Question: I understand that the Marathon south west gas field, in Ireland, is now being used for gas storage. Could it be used for compressed air storage to help solve Ireland’s wind energy penetration problem?

I would appreciate your feedback on this issue. Please let me know if I can reprint your reply on my blog

Kindest Regards



I look forward to publishing their reply.

19th August 2007

I havn’t heard back from Marathon. I’ll try more local contacts and I will publish whatever reply I get. I think that natural gas wells may not be suitable for CAES because mixing air and natural gas makes an explosive mixture.

In the meantime I found the following two references to the two oldest CAES projects in existance.

Huntorf, Germany

McIntosh, USA

Embedded Generation Synergy Module (EGSM) test laboratory.

In my last blog I gave an outline of how I am putting the infrastructure into my home to turn it into an off peak synergy module laboratory. I am also developing a test site for embedded generation synergy module (EGSM) concepts. To get full details on the overall project please visit

The normal electrical load at the CIX data centre will be around 550kW. I am planning to put a 1.1MW multi-fuel grid synchronised generator into the CIX data centre. That generator will be controlled by an EGSM and will in effect turn the data centre into a grid stabilisation device capable of either sourcing or sinking approximately 550kW.

CIX will have a 10kV grid connect and a UPS system that will enable it to ride through any power variations that will occur moving from site power consumption to site power generation.

By running the generator on bio-diesel or PPO it is possible to make CIX a carbon neutral data centre. By using the embedded generation capacity in the data centre, CIX will be facilitating the penetartion of wind energy into the Irish electrical grid by improving grid stability.

Off Peak Synergy Module (OPSM) test laboratory.

I am planning to turn my home into a little energy test laboratory so I can experiment with Off Peak Synergy Module concepts at the domestic scale. I have installed a 500 litre insulated stainless steel tank to store hot potable water. I will install a further 1000 litre insulated tank to store central heating water. These tanks mean that I can store enough hot water for one day for both washing and central heating.

I will install a large solar panel to heat the water in both tanks. I will supplement this solar heating with a water to water heat exchanger which will be electrically operated using off peak energy. In the winter this heat exchanger will take heat from a glass covered swimming pool. In the summer, after both tanks are full of hot water any surplus heat will be transferred to the swimming pool.

Karen and I bought this house nearly two years ago and it has oil fired heating which I will now replace. Living in the country, I have access to waste timber so I bought a wood burning stove and installed it in our living room. In return for some work this will give about another 5kW of heat for evenings where the heat pump cannot cope with very cold weather.

It takes 1kW to raise 1 litre of water one degree C in one second. Therefore a 3kW output heat pump would require 167 seconds to raise the temperature of the water in the tank by 1 degree C.  This means that a 3kW energy supply would require about 2.5 hours to raise the water in the tank by 50 degrees C. Therefore this potable water tank can be seen as a 7.5kWh energy storage device. Our larger water tank for heating can be seen to store 15kWh of energy.

I drive a Toyota Prius car. I am interested in various articles that talk about plug in hybrids and I plan to purchase a kit to convert my hybrid to a plug in. I then expect my Synergy Module to charge my car each night with low cost electricity.

As Ireland has an abundance of sites for commercial wind energy exploitation, I see no ecological advantage to installing a wind turbine at my home. However if PV solar panels drop in price I am hoping that my Synergy Module may trade some high cost day time electricity for low cost night time electricity and reduce my overall energy bills.

Google and Vehicle To Grid (V2G)

The work that Google are doing on solar energy and hybrid cars is fascinating. Reading the following blog from Google though adds a new element to the mix.

Google are growing a fleet of plug in hybrid cars. These are standard hybrid cars with larger batteries fitted and the ability to charge from the electricity grid. The blog also mentions vehicle to grid (V2G) technology. This allows the bidirectional transfer of electricity between the electricity grid and the plug in hybrid.

In the context of Ireland’s need to consume surplus wind generated electricity, electric vehicle or hybrid vehicle batteries would be an ideal candidate for energy storage where the stored energy replaced fossil fuels when consumed on the following day. According to the Irish Examiner (19 June 2007), Toyota are selling 400 Prius hybrid cars per annum in Ireland. Obviously the installed base would have to be much higher to have a significant impact on grid stability.

Supply and Demand of Electricity

The following graphs contain the actual electricity demand and actual wind energy demand curves for 16th February 2007 for Ireland. The third in the series plots the percentage of the national grid that was supplied on that day by wind energy. The raw information was downloaded from the archives of, the Transmission System Operator (TSO) in Ireland.

You can see that wind production went from nearly 20% of demand to almost 0% of demand in one day and worse of all was the fact that it did so completely out of sync with the demand usage curve. Wind energy supply and electricity demand were not matched. This mismatch creates difficulties for network operators because, apart from limited pumped hydro storage capability, electricity cannot be stored and it takes time to start and stop fossil fuel burning electricity burning stations. Also, because of the unreliability of supply, it is necessary to have enough non wind based capacity to meet maximum demand.

Despite the green credentials of wind energy there are problems with its implementation. If wind energy production, in Ireland, is to rise higher than its current 4%. We will have to implement either pumped hydro storage or demand management. Demand management is cheaper and faster to implement and I believe it is the necessary option for Ireland. Perhaps there is a place for pumped hydro storage also.

Current pumped hydro storage capacity in Ireland.

As far as I am aware, there is only one pumped hydro storage facility in Ireland. This is located at Turlough Hill

Current demand management projects in Ireland.

The following pdf presentation gives an overview of current EDM schemes in Ireland.