Demand Side Response

Current grid infrastructure can only support so much power. Sometimes energy demand outweighs what the grid can supply, which can result in grid instability and increased risk of outages.

To help balance supply and demand, utilities or grid operators offer demand response (DR) programs to incentivize customers to be flexible with their energy consumption during peak hours or when certain grid conditions occur.

  • U.S. customers in some territories can participate in demand response programs in which they are compensated for curtailing their electricity use during periods of high power prices or compromised grid reliability.
  • European customers can participate in the fast frequency response (FFR) and frequency containment reserve (FCR) markets where balancing service providers (BSPs) prevent grid instability and power outages.
This gives EV charge point operators, fleets, and other charging site owners an opportunity to increase the value of their onsite renewable energy, EV chargers, and energy storage system to generate additional revenue.

What is demand side response?

Demand side response (DSR) refers to the strategies energy providers use to influence electricity demand rather than solely focusing on increasing supply to meet it. DSR encourages energy users to alter their electricity usage patterns, either by reducing or shifting their consumption during peak periods, or increasing their usage during times of low demand or high supply. Grid operators and utilities achieve DSR through various incentives, pricing mechanisms, and technological solutions.

Sparkion energy management software screenshot for ancillary services

How can EV site owners benefit from demand response programs?

Demand side response can be beneficial for both EV charge point operators (CPOs) and EV fleet owners. BSPs will compensate EV-site owners who can respond to grid events to maintain stable power.

Cost savings

Both CPOs and fleet owners can significantly reduce their energy costs by shifting usage to off-peak periods and taking advantage of lower electricity prices. CPOs can implement dynamic pricing models in which the cost of charging varies depending on the time of day and the level of demand. This encourages customers to charge their vehicles during off-peak hours when electricity is cheaper and more abundant. Furthermore, EV charging stations equipped with battery energy storage systems (BESS) can store energy when it is abundant and cheap, and then use it to charge EVs during peak times. This reduces demand on the grid as well as operational costs.

Likewise, fleet owners can schedule the charging of their EVs to occur during off-peak hours. This not only reduces electricity costs but also helps in balancing the grid load.

Grid reliability

DSR enhances grid reliability by balancing demand and supply, preventing blackouts, and reducing the need for expensive peaking power plants. CPOs can use DSR to manage the load on the electrical grid more efficiently. By shifting the charging times of electric vehicles to off-peak hours, CPOs can reduce the strain on the grid during peak periods. This helps to avoid grid congestion and potential outages.

Sustainability

By enabling more efficient use of renewable energy sources and reducing reliance on fossil-fuel-based peaking plants, DSR contributes to lower carbon emissions. Engaging in DSR helps fleet owners and CPOs contribute to a more sustainable energy future by using renewable energy more effectively and enhancing grid stability. This aligns with corporate sustainability goals and can also appeal to customers.

Additional revenue

Participation in DSR programs opens up new revenue streams for CPOs and fleet owners, allowing them to monetize their flexibility in electricity usage. CPOs can provide ancillary services to the grid, such as frequency regulation or demand reduction during critical times. By coordinating with grid operators, they can offer load curtailment or increase during specific periods to help balance supply and shift demand.

Fleet owners can also participate in DSR programs via vehicle-to-grid technology, which allows their EVs to act as distributed energy resources supplying power to the grid during peak demand periods. They received incentives such as reduced electricity rates, direct payments, or other financial benefits for providing demand response services.

In these ways, DSR provides a framework for EV charge point operators and fleet owners to optimize their energy usage, reduce costs, and support grid stability while also contributing to broader environmental and sustainability goals.

What do EV site owners need to participate in demand side response?

Participation in demand response programs while maintaining site uptime requires the right combination of hardware and software to interact with the smart grid

Energy storage system: While it is not strictly necessary for EV charging site owners to have an energy storage system (ESS) to participate in DSR programs, having battery storage can significantly enhance their ability to engage effectively and reap greater benefits including:

  • Load management and cost savings: Storing energy during off-peak hours (when electricity is cheaper and more abundant) and using it during peak hours can help reduce the need for grid power, manage loads more efficiently, and reduce peak demand charges.
  • Increased flexibility: With an ESS, charging site owners can respond more flexibly and quickly to DSR signals from grid operators. They can provide demand reduction or supply additional power as needed without disrupting charging for EV users.
  • Generate more revenue: ESS enables more consistent and reliable participation, maximizing DSR and frequency response opportunities. With an ESS in place, EV charging sites can more easily scale their operations and integrate additional DSR and renewable energy capabilities as demand for EV charging grows.
  • Renewable energy: Again, while not critical for DSR, adding clean energy, like a solar system, to an EV charging site allows storing excess production for later use (or to selling it back to the grid) for cheaper, more sustainable energy and additional revenue generation. By integrating renewable energy and storage, EV charging sites can become more energy independent, reducing vulnerability to grid outages and price volatility while also having the ability to supply cost-effective, clean power to the grid when it’s needed outside of typical production hours.
  • Energy management system: BSPs will reward EV-site owners for their ability to respond quickly and accurately to grid events to maintain stable and reliable 24/7 power. At the same time, CPOs need to maintain consistent charging operations. An energy management system, (EMS) can help automatically direct onsite energy use and consumption for optimized operating costs as well as revenue generation. An EMS can allow scheduling fleet or battery charging during lower utility time-of-use rates, identify available electricity to sell back to the grid, draw from battery power when grid electricity is costly or insufficient, and more.
     
    For example, Sparkion’s EMS integrates with all your site assets (from EV charging stations to BESS to C-store, solar array and more) and uses real-time insight to automatically bid into these programs when opportunities arise, so you can generate additional revenue while seamlessly maintaining your everyday operations.

    By combining real-time insight about electricity use from your onsite meter data and BSP requirements via an API, Sparkion uses advanced algorithms to make intelligent decisions that maximize revenue potential through market bids without jeopardizing the uptime of your operations. The ability to get paid every time you participate in a grid event while your EV charging keeps running smoothly allows you to enjoy smart energy management and value stacking in your business.

Sparkion energy management system for EV sites
Sparkion allows your EV charging site to participate in demand response and frequency response using advanced algorithms to provide an additional revenue stream while maintaining uptime.

Want to learn more about how Sparkion enables you to reduce costs and earn revenue through utility demand side response programs?