When I grew up (1970ies), food availability still followed seasons. In spring I was looking forward to the first radishes. Then a bit later fresh strawberries became available. Cherries were ripe close to the end of school. Finally grapes arrived in autumn. Short, most fruit was only available once a year and one would look forward to the harvest: the demand follows natural supply — a simple form of demand response.
Today our civilisation got accustomed to having non-seasonal fresh food any time of the year. This is mostly possible due to cheap fossil energy (partly for transport, e.g. air freight) or the exploitation of other resources such as aquifers; this permanent availability, albeit convenient, is not sustainable. Therefore, some correcting measures will have to be introduced. More aggressive carbon pricing and incorporating known externalities will render this anything-anytime civilisation economically not viable. As a consequence, strawberries in winter (in the Northern hemisphere) would not need to be prohibited, but would become prohibitively expensive. Demand would follow natural supply — again a simple form of demand response.
Consumption behaviour for fresh seasonal food is applicable to other products and services, too, all of which need energy, in production and most importantly for transport. Similarly to the availability of fresh non-seasonal food, we are accustomed to consuming energy, and anything that consumes energy, any time at an unnatural fixed cost. As a result of the transition to renewable energy, however, energy (as in instantaneous power) cannot be available any time at the same rate due to the sources’ intermittency (mostly solar with a bit of hydro and wind). Furthermore, in a free market economy, demand and supply cannot remain balanced without additional measures. All of these have their own costs, but would together contribute to a solution:
- energy storage as a buffer between supply and demand; store energy into the buffer when there is more supply than demand, retrieve energy from the buffer in the opposite case, both seasonally and daily. Storage could be distributed at domestic and utility scale, using a combination of battery, pumped hydro and other means. However, it is neither easy nor cheap to store energy that bridges seasons, and it takes time to build.
- distribute energy supply and demand on a large grid which has an equalising effect. Development on large grids, super grids and a global grid, using UHVDC interconnects is on the way to exchange power: east-west for daily changes, and north-south for seasonal changes. However, apart from technical challenges, there might be some political impediments that make global grids nearly impossible.
- over-capacity, just make sure that for a given grid, there is enough capacity that even in a wind lull and without much sun, still enough power is produced to meet demand. However, a large over-capacity factor would result in a commensurate cost increase.
- demand response proper, what this story is about.
As far as energy is concerned, there is a lot of information on demand response and its variations such as automated demand response. IEA defines Demand response as:
Demand response refers to balancing the demand on power grids by encouraging customers to shift electricity demand to times when electricity is more plentiful or other demand is lower, typically through prices or monetary incentives.
The objective of demand response is to adjust the demand to the supply, and not the other way round; in a more classical approach supply follows and meets demand. A desirable demand response can be achieved by introducing spot-pricing for energy with a forecast of energy prices for a horizon ahead, e.g. flexible energy prices such as the ones offered by Octopus Energy in the UK. When demand is predicted to outstrip supply, the price can be set higher for the period ahead; when supply is predicted to outstrip demand, the price can be set lower; both perhaps for brackets of 10 minutes to one hour slots ahead. As consumers would try to minimise their expenditure, there would be several outcomes:
- demand behaviour patterns of domestic consumers will be altered. While perhaps the time for cooking dinner on an electric stove would not change too much, other activities such running a dishwasher could (with smart appliances). It would be important to profile the power consumption over a day and year to see the potential of shifting habits and minimising cost.
- demand behaviour patterns of commercial or industrial consumers can be altered, too, depending on the nature of the business. Perhaps smelting of metals, mashing cellulose, or other energy-intensive processes could potentially be shifted during the day, or even year, resulting again in lower energy cost to the business.
- investment in local energy storage, at a domestic or industrial scale. For the latter, if energy is needed in heating matter; this counts as storage.
Once a feedback-loop to the consumer is introduced in the form of the visibility and reduction of the cost of energy consumption — for domestic, commercial or industrial alike — then market mechanisms will rectify the situation: balance between demand and supply re-established. That said, demand response is merely a means in market economy by introducing transparency and incentives: demand follows and adjusts to supply as a consequence of cost optimisation on the consumer side. No distortion of prices takes place, e.g. by making them artificially constant.
While the term Demand response is mostly used in energy supply systems, the message I would like to pass is perhaps: demand response in a more general sense could mean to adjust all our demands to what can be reasonably be supplied, i.e. go back to seasonal life, i.e. accustom our life patterns to more natural ones, more in harmony with nature, the daily and seasonal cycles of light and climate. Why not work less in the winter season but work more in the summer (in the northern hemisphere)? The winters used to be time to rest.
I grew up on a farm where the summer used to be the period of long working hours and lots of sun. It is after all solar radiation which is the primary external energy input. Why not reduce industrial output during periods of less available renewable energy in the winter (in the northern hemisphere) and shift output to the summer, too? After all, it is better to make your hay in the summer.
In a world that lives within the limits of the planet and is fuelled by renewable energy (solar mostly), demand would naturally follow natural supply — the ultimate Remand Response.