A more flexible power system helps grids adapt to rising renewable power generation. Flexibility from large industrial power consumers is central to such a network.
That idea is the focus of a study by the German energy agency into industrial demand-side flexibility. The Industrial Demand Side Flexibility in China report produced by the Deutsche Energie-Agentur (Dena) contrasts successful pilot projects in Germany which offer flexible loads on spot markets and balancing power markets, with the far more rigid system in place in China’s industrial powerhouse.
China’s approach to fostering demand-side flexibility, according to the report, relies on a static and highly regulated framework that includes orderly power consumption and peak-to-valley pricing schemes. The latter allows for some differentiation in power prices based on hours of high and low demand but the distinction is rudimentary because rather than responding to measured, real-time grid requirements, the hours in which it is cheaper to buy energy as an industrial consumer are predetermined. That strict timetable is governed by the daily commute of the majority of workers.
Energy-on-demand, of course, does not tally with the typical generation hours of solar and wind power farms, prompting a need for immense storage capacity. Demand-side flexibility has been posited as one solution as it would shift significant portions of demand to more convenient hours for renewables generation. However, not all industrial processes can offer flexibility without losing production efficiency, and therefore driving up demand for power and materials.
The Dena report considers China’s 217 aluminum smelters which, based on typical power demand of 13.5 MW/ton of the metal produced, consume 774.9 TWh of power to manufacture their annual output of 57.5 million tons. That figure equates to 11.3% of China’s electricity consumption last year.
The study stated aluminum smelters run 8,600 full load hours per year and total breaking capacity comes in at 90.1 GW. “The core unit of aluminum production is the electrolytic cell, which accounts for about 90% of the total electricity consumption,” the report continued. “Typically, aluminum electrolysis requires a steady load curve to maintain the high quality of the product.” German aluminum producer Trimet has reportedly demonstrated a process which uses the electrolytic cell as a form of energy storage without compromising product quality.
Lack of incentives
The potential of flexibly shifting such a load in that industry alone would be profound. Loads could be shifted temporarily, for a maximum 24 hours, and increased or decreased by 10%. If consumption level were reduced to 90% then ramped up to 110% over 24 hours, the shifted capacity would be 18 GW. Over a full day 432.5 GWh could be moved – 2.3% of China’s average daily energy consumption last year.
Dena interviewed major Chinese aluminum producers about the topic and found the lack of incentives for such load shifting was critical, especially with manufacturers displaying little knowledge of the possibility of using electrolyte cells as energy storage.
The traditional, thermal-power based electric system penalizes industrial power consumers which have highly variable demand because of the care needed to balance supply to other consumers. The demand-side flexibility which would ease the integration of renewables into grids should instead reward manufacturers with such flexible power needs, Dena said.
Virtual power plants
The energy agency study lists examples of the successful trial of demand-side flexibility measures including flexible load aggregation, peak-valley price bidding, AC load bundling and valley price filling with the resulting changes in load profile managed by virtual power plants. In each case, the introduction of financial incentives saw industrial energy consumers quickly come around to the idea.
The report’s authors noted a test market for ancillary grid services has already been opened in Guangdong province and could be extended to include demand-side flexibility offered by industrial consumers. The regulator must draw up rules for qualifying for incentives in return for offering such services, said Dena, and could introduce technical pre-qualification processes and offer remuneration for demand-side flexibility over short periods of time.