Responding to Peak Electricity Loads Using Renewable Fuel

Abstract

South Australia's existing electricity infrastructure and its market operation works very well for the majority of the year when demand is moderate. Under these conditions normal fluctuations in demand result in predictable supply responses. However when demand is unusually high, such as during the afternoons of extended heat-waves, the electricity market becomes much more to difficult to operate and manage. Under these conditions, market prices peak excessively relative to power consumption fluctuations. This paper presents an assessment of the technical and economic conditions that lead to these excessive market prices. The assessment includes an evaluation of the potential of using large scale storage of hydrogen to enable suppliers and market operators to manage these very high peak loads more effectively. In this scenario the hydrogen would be produced via electrolysis during those not uncommon periods when the potential supply of renewable power is greater than actual consumption. This situation is already potentially available during the night when available wind power supply exceeds demand, and could potentially be expanded in the future to include geothermal energy supply. The stored hydrogen would then be used to supplement actual grid power that matches actual demand during the short duration periods of peak demand. Various alternative generation options are evaluated. An assessment is also presented of options to control such a system using a smart grid, noting that despite being rare, the periods of peak demand can be reliably predicted from regional ambient temperature forecasts.