The problems with a ‘pipe’ limit in cutting peak load

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There have been some suggestions that placing an upper limit on a household’s connection to the grid, as is done in many countries, would be a good way to limit demand peaks in Australia. However, it appears this is unlikely to be useful on its own as a peak load reduction strategy.

The charts below show the times and seasons of the annual demand peaks for two different datasets (a total of 361 houses). Although the peak for each aggregated dataset occurs in summer, as is common for residential networks, less than a third of the individual household peaks occur in summer, with about half of the peaks occurring in winter. Although the most common time for individual household demand to peak is around 5 to 7pm (which includes winter peaking houses), more than half the houses peak outside this time.

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Each aggregate peak is in summer because the times of generally high demand are more tightly clustered in summer than they are in winter. 

This means that simply applying a demand cap, or ‘pipe’, will have a much greater impact on peaks outside the network peak than it will on the network peak itself. This has two consequences (i) it may penalise those who are not contributing significantly to the network peak, and (ii) it is economically inefficient in that peaks outside the network peak are being limited unnecessarily. For example, applying a 6kW ‘pipe’ to the houses in the following chart would reduce the network peak by 5.2% whereas the aggregate reduction in peaks outside the network peak would be 17.4%.

The chart below compares each household’s annual peak with their demand during the time of the network peak. All the households above the red line have an annual peak that is greater than their peak during the network’s annual peak – which is all but one. For example, the red marker has an annual peak of 14.15kW but was contributing only 0.36 kW during the network peak.

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Of course, simply restricting each household’s demand during the time of the previous year’s network peak could just shift demand to a new unrestricted peak. It is likely that limits should apply to all periods that are at or near the season and time of the network peak. Demand limits of some kind for individual households may also increase customer awareness of demand, where previous focus has been only on energy. This may serve to flatten load patterns and reduce the likelihood of growth in demand peaks over time.

Different feeders have different peak periods, however having feeder-specific peak periods and restrictions would be complex and have high administration costs – although it is possible to envisage a time when smart meters, remote monitoring and automation could make this feasible. Thus, at this stage, regional or network-wide averages could be applied. The most equitable way to do this is through a demand charge that is applied in proportion to each household’s contribution to the annual peak. However this may be quite difficult to implement ex post, and would need to be applied incrementally, accompanied by customer education.  This is the focus of ongoing research at the APVI, particularly in relation to the regulation of distributed energy options.

This work was carried out for the Australian PV Institute. Rob Passey works at UNSW and IT Power, Ben Noone is at UNSW and Muriel Watt works at UNSW, IT Power and Australian PV Consulting.


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  • barrie harrop

    How do stop thousands of people in the midst of heatwave going off to Harvey Norman and buying 2-3 airconditioning units loading up the grid ? that has never been designed to cope nor is there sufficient base load generating capacity for these peaks–“distributed energy” is coming.

  • Rob Campbell

    I don’t believe that a pipe would necessarily do the job, however what should be considered in the data offered doesn’t indicate the considerable difference between the Northern and Southern states as to peak electricity usage. For example, cloud cover on a winters day in Queensland can have a warming effect, whereas in Melbourne it could worsen the cooling brought about by southern ocean winds. The critical thing to reduce demand is to encourage people to store and use their own power, whether that be solar, or off peak. In this situation, and given there is now plenty of technology to do so, customers should be offered a real time of use tariff, not one that rips you off for 16 hours a day and lets you breath for only 8. I propose a four tiered TOU tariff that reflects the demand on the grid. Level one could be energy only (ie not network charge) say 6 cents /KWH between 12AM and 6AM, Level 2 energy plus 50% network charge (say 15c + 6c = 21 cents) 9PM- Midnight and weekends, Level 3 energy plus 100% network charge say 30c + 6c = 36 cents. 10AM- 4PM weekdays and Level 4 150% network charge say 45c + 6c = 51cents 4PM- 9PM.
    It should however that once the bulk of customers make their own arrangements to install the necessary gear to shift their demand and the network capacity is improve that a proportionate downward movement in network charges should be legislated.
    In order to protect the financially disadvantaged customers with a usage of under 15KWH per day can opt to stay on a fixed access charge of 50 cents a day and 25 cents a KWH. This way the people who want out of being cash cows for state governments have some form of defense available.

    • wideEyedPupil

      I’d rather be a cash cow for my State’s government services like PT and Health (not that I use either as a bike riding healthy vegan) than a cynical corporation that does nothing more than attack renewables and angle for guarantied profits and compensation for losses at every point in the game.

      • Rob Campbell

        I’m all for public transport and welfare to those genuine people who need it. I don’t agree that the government should raise money from one activity to pay for another, such as electricity. I’d sooner pay a higher Gst than be taxed from behind, the current back door fundraiser have bugger all traceability and accountability.

        • wideEyedPupil

          I guess you aren’t an accountant then, funds go into general revenue whatever their source. Taxing social ills is a legitimate way to raise funds. So are setting up SOEs that can deliver better services than the ‘free market’ e.g. what was to be our NBN and will now be a pathetically overpriced joke of a copper based network thanks to ideologues who can’t see the government do any good except for rewarding the 1%.

  • Albery Moray

    I suspect (air conditioner driven) demand peaks happen because people wait to switch on their air conditioner until it is uncomfortably hot or cold. This happens because they fear the energy bill. If they could accumulate “warmness” or “coolness” in their homes during the prior few hours then the demand peak could be flattened (how much?). The idea is to start cooling the house earlier and then “idle” at lower power to maintain the temperature rather than letting the house get really hot and then using a large power to cool it down after it gets hot. This of course assumes that the house is thermally efficient in the first place so that the accumulated warmness or coolness does not leak out of the house too quickly and require a lot of power to counter the leakage. Smart grid can probably do this by anticipating load peaks and switching people’s aircon a bit earlier to avoid a big peak, but the aircon units could do this for themselves too (if they were a bit more intelligent). Heat and cold could also be stored in a large water tank for later use. This would also flatten the demand peaks. I think I might patent these ideas if someone hasn’t already done so 🙂

  • Matthew Wright

    The key is to have a critical peaks minimum pipe. And the times
    at which the minimum pipe profile occur are advertised in the news media
    as red days.

    This already occurrs in France and other countries. On a red day you
    as a customer can either pay a super high rate per kWh or kVA access or
    you can opt to have capped pricing where you get disconnected for 5
    minutes if you breach a pre-contracted critical peak capacity limit.
    Most customers would then opt for 5kVA for critical peaks allowing them
    to run 2 or 3 mini-split air conditioners and do other things around the
    house. For this limit a customer would pay what they pay for today on
    their daily charges and what an average customer pays for the annual
    distribution component of their kWh charges across the grid. So
    something like $1000-$1250 would buy 5kVA access to the grid. A
    customers that really wanted to save money would reduce to $250 for 1kVA
    and would have to be mighty lean during network peaks (or use their
    air-conditioner while their onsite household solar system is producing).

  • wideEyedPupil

    Pipes and tariffs are two sides of the same coin. Tariffs require home user intervention to reduce demand at peak times while pipe capacity contractually predetermines usage limits. Thanks to the authors for shedding a bit more light on the pipe scenario. It’s a shame appliance manufacturers are still not making their appliances network smart just standalone smart despite the emergence of low cost networking interfaces like Electric Imp which I understand GE has chosen to integrate. Much work remains to get smart buildings and electrical networks talking the same language, and most of the interesting activity seems to be on the automation side of the conduit so far.