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Electricity Demand Response Can Raise Anaerobic Digestion & Biogas Profitability

Electricity Demand Response (EDR) technology which enables energy producers to vary the unit price they charge and pay for their electricity according to supply and demand is here to stay.

The Anaerobic Digestion and Biogas Industry is well-placed to benefit from EDR technology. It can raise the profitability of these plants.

AD and biogas plants have the innate ability to store gas supplies in their facilities. They can be configured to rapidly ramp up generator output to feed electric power into the grid when it is most needed.

Half an hour or so later the rate paid per kWhr drops and AD plant generators can be wound down and output less. This is all automatically controlled via the world wide web and integrated into new “smart metering” systems which are emerging.

Image text: "Electricity Demand Response explained".

Biogas Electricity Demand Response Advantages

By adopting a suitable Electricity Demand Response strategy, the rate paid for the energy produced by AD plants can be an order of magnitude higher than standard feed-in tariffs.

The result is that biogas plants become much more financially viable and with a higher income they become better investments with greatly reduced payback periods.

Why is Electricity Demand Response with Variable Charging Needed

To make the energy market more sustainable and ecologically friendly, renewable energy sources such as wind and solar power have been incorporated into power systems. As a result, both the frequency and size of the supply-demand mismatch in power networks is greater than before.

Consequently, the capacity to make supply and demand changes in electricity networks must be strengthened. Biogas plants' dynamic properties, especially when paired with combined heat and power (CHP) systems, make them appropriate for EDR power generation.

Biogas is a controllable, on-demand electrical power source that may be used 24 hours a day, seven days a week.

The prospect of employing the technology as a new resource for supply-demand changes in the power grid has been favourably assessed by energy experts.

The Long Term Perogative of Decarbonization

Global warming poses serious long-term threats to people and the environment. Things we rely on and value, such as water supply, energy availability, low-cost transportation, healthy wildlife, productive agriculture and vibrant ecosystems. And, not least, human health, are all being negatively impacted by climate change.

While the public's perception of the impact of the climate issue has improved, reality has not.

For heating, cooling, transportation, and industry, the bulk of the globe continues to rely on fossil fuels. Biogas produced by the anaerobic digestion process can play an important role in the transition toward sustainability.

In the future biogas plants must produce electricity in a demand-oriented manner. This will be vital in the future energy system to compensate for the unreliability of electricity generation from variable sources such as wind power and photovoltaics.

Flexibilisation methods enable coordinated feeding management that adjusts biogas output based on various gas production kinetics of utilised substrates.

Appropriate projection models for electricity consumption could be used to enable the creation of a projected biogas output schedule.

Electricity demand response meme
Electricity demand response meme


Electricity Demand Response in the Anaerobic Digestion and Biogas Industry

Electricity demand response is being adopted in many countries to help electricity companies cope with the fluctuations in supply which are inherent in most renewable energy technologies except for anaerobic digestion.

Anaerobic digestion with its high up-time and 24/7 power production capability, is not a part of this problem.

In fact, anaerobic digestion, with its ability to store biogas as an energy source, can help by the production of electricity which can be switched on and off, to order.

Now that demand response is also considered a mainstream methodology to bring about the strategy of decarbonisation and sustainable development we thought that we would write this article, to discuss how AD Plant facilities may become involved in the electricity demand response market.

What Does “Demand Response” Mean to the Energy Industry?

Demand response (called load response by some) is defined as:

“The ability for qualifying end-user commercial customers to reduce their use of electricity when wholesale prices are high or the reliability of the electric grid is threatened. In turn, customers who participate receive discounted rates.”

On the demand side, and also the electricity companies are increasingly using “demand response” techniques, on the supply side, by allowing potential power contributors into the grid to bid for instant response peak demand period supply contracts. These are either directly overseen by National-Grid, or awarded and administrated through 3rd parties.

Bid prices for electricity provided as a demand response are always higher than standard rates.

In the UK the following Demand-Side opportunities* are available to the right businesses, amounting in all to some 15 schemes:

1. Short Term Operating Reserve (STOR):

An important source of reserve energy for National Grid, STOR is procured through 3 tenders throughout each year. Users contract to reduce usage by a specified amount with a response time of 20 minutes.

2. Demand Side Balancing Reserve (DSBR):

A time-limited tendered product aimed at major energy users willing to reduce their electricity use between 4pm and 8pm on winter weekdays in return for payment.

3. Fast Reserve:

A monthly tendered market designed to procure large blocks of reserve energy of 50MW to respond within 2 minutes.

4. Firm Frequency Response (FFR):

A monthly electronically tendered service through which National Grid procures energy that can respond within 30 seconds.

5. Demand turn-up:

A new service, under development, which will pay businesses to increase demand when there's too much energy in the system, typically responding within 10 minutes.

6. Triad Avoidance:

The practice of reducing consumption at periods where peak winter national demand is forecast (Triads), in order to reduce the transmission charges that are levied on major users.

Implementation for Biogas Producers

For AD Plant power generators, the opportunities which seem most likely to suit the AD Plant operator will be 3, and 4.

Few AD Plants will be large enough to participate in the Fast Reserve 2 minute requirement unless their owners were to install dedicated engine sets fuelled by dedicated biogas storage. However, as long as the site has the capacity to inject an additional 50MW the high price paid for the energy produced may make such an investment profitable.

To service, the Firm Frequency Response (FFR) requirement for a 30 second response time, AD plant operators could possibly install battery banks, with the batteries re-charged using biogas generated electricity.

New “Smart” Power Grid

The information systems to automatically communicate to the remote electricity demand response equipment will be essential to move the electricity supply industry from the existing grid systems to the new “smart” power grid.

The smart power grid will be essential to improve the ability of the grid operators to balance electricity supply and demand. It will be designed to do it by transferring electrical power loading to split-second accuracy.

This will be done as an electricity demand response, initiated at each electricity demand response event. Each power injection event will need to be instigated based on a pre-assessed calculated supply gap and paid for at the appropriate high electricity prices.

All this requires a new type of information system, namely a computer-based “Smart” Demand Response system.

*_ List based upon September 2016 edition of Water & Wastewater Treatment and may vary.

[Article first published in November 2016. Updated October 2021.]

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