In this summer, when the heat wave continues, electric power companies are continuously suppressing demand using demand response. At Kansai Electric Power Co. on July 17 and 18, TEPCO on August 1 and 2, they restrained the demand in advance, and managed tight supply and demand.
Let’s organize this process of coordination power, which is given the esoteric name of power supply I ‘(Ichi Dash).
First of all, the entity that secures coordination power is the transmission and distribution department of the electric power company. The required coordinating power is determined in advance by the Organization for Cross-regional Coordination of Transmission Operators as an amount that can withstand severe weather that occurs once every 10 years. The transmission and distribution department secures this equivalent generation capacity or demand suppression capability by bidding for recruitment. As means to realize supply capability, either increase in supply or decrease in demand may be acceptable, but as rare events are not triggered, it is considered that demand reduction bidding based on demand response is common.
How is the demand suppression amount secured?
Since long ago, electric power companies have secured demand suppression amount called supply and demand adjustment contract, mainly for large-scale industry, and prepared for tight supply-demand. In preparation for summer and winter seasons, the electric power company carried out a considerable fee discount, such as shifting the factory operation in advance to a holiday or night-time, or adjusting the load through notice several hours before the tight hour. However, in addition to the slowdown in electricity demand, the spread of solar power generation, and the need to reduce costs, these contracts are currently canceled to a considerable number.
Demand response operators are encouraging industrial sectors and purchase low-priced demand-suppression capabilities that have been secured at factories before, and are applying for recruitment. The adjustment power secured in this manner is activated / restrained when requested by the power company’s transmission and distribution department. In other words, it is probable that the subject of suppression of demand is still the industry.
Looking at these facts, it seems that there is no big difference between the conventional demand-supply adjustment contract and the current demand response, but recently there is a new movement emphasizing economic efficiency.
In the spot market of the Japan Electric Power Exchange, the price hike at the time of supply-demand tightening is remarkable, and this summer we can see the time zone exceeding 100 yen / kWh. Demand response operators consider this to be business opportunities, trigger demand restraint at the price rise, sell surplus electricity at exchanges, and earn margins. TEPCO Energy Partner and Energy Pool Japan have already started such transactions (economic demand response).
In fact, this is effectively no less than a de facto resale from the industry with suppression capacity to retailers suffering from supply and demand tightly. Demand response operators are considered to mediate arbitrage transactions as intermediaries of both parties.
Such transactions will be realized in various ways from now on. As a result, retail / wholesale electricity charges, demand response price, renewable energy purchase price, etc. are thought to converge in the long run, but this will take considerable time. In the meantime, many new businesses that have noticed price differences are expected to emerge. Economic demand response will be a sign of such a deal.