How demand-side management can shape electricity generation capacity planning

Abstract

Forward-looking strategies for Demand Side Management (DSM) can accelerate the clean energy transition and reduce carbon emissions if electricity load can be shaped to be better matched to the hourly availability of renewable resources. Time-varying rates are increasingly used to motivate load shifting, capitalizing on the increasing size of loads that can be easily shifted, such as electric vehicle charging and electric heat pumps. This study analyzes the hourly availability of current and renewable resources for two representative electricity grids in the USA. While many demand-management programs are currently designed to shift load to nighttime when demand is low, to use low-cost PV the opposite shift into daytime will be preferred. Given that investments in electricity generation capacity shape the grid for decades, generation capacity planning should proactively anticipate how DSM programs (and associated load shapes) will change as the generation mix changes. These future load shapes determine the optimal resources to be acquired and can be modified by DSM to facilitate variable renewable integration. Ongoing regulatory proceedings in Colorado are described as a case study for an existing decision-making process.