While the world struggles to adjust to climate change and an increase in extreme natural events, and as we respond by replacing fossil power with renewables, global energy grids face growing stresses and potential outages.
Historical solutions to these stresses revolved around expensive infrastructure upgrades, including centralised standby power stations (or “peaker plants”) to boost energy supply. In today’s increasingly digitised, decentralised and decarbonised context, the focus has shifted to reducing demand during such events. This emerging discipline is known as Demand Response (DR) and it is deployed during DR or “dispatch” events.
Demand Response is defined by the International Energy Agency as “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.”
The growth in Demand Response is fuelled not just by greater frequency and severity of extreme events, and the transition to more intermittent renewable energy sources, but also by increasing planning hurdles for large infrastructure projects and the global roll-out of formal Capacity Markets. Through such markets businesses that are able either to reduce non-essential energy use, or to increase energy generation when the grid needs support, can receive payments for participation.
During dispatch events these widely-distributed energy assets can be managed and aggregated in real time across multiple sites, countries and time zones through remote network operations centres. Here we take a look at how one such centre, operated in Dublin by Enel X, sustains a 24-7, 365 balancing act to monitor and manage energy across more than 15,000 global commercial and industrial sites; turning assets up or down to keep homes comfortable and businesses running during periods of exceptional grid stress.
The number of these dispatch events is increasing all over the world. In the case of Enel X’s Network Operations Centre (NOC) they have grown more than fourfold in the last seven years, from 333 in 2017 to 1340 in 2024.
Responding to increasing energy intermittency
An extreme example of such dispatch events is the series of devasting earthquakes and aftershocks in Taiwan during April 2024.
On 3rd April, the day of the largest quake, Taiwan’s state power company (Taipower) issued a dispatch notice at 4:30pm, calling for reserve power to help stabilise the grid. Enel X’s Network Operations Centre immediately mobilised and aggregated the energy load of over 50 commercial and industrial scale users, providing nearly 30 megawatts (MW) of Demand Response (enough to supply approximately 25,000 US homes for a year). Companies from sectors including textiles, chemical processing, hospitals, metal processing, food, agriculture and hotels activated their flexible energy resources to help maintain grid frequency and stability over two hours.
Throughout this challenging period, Enel X’s network operations team responded in real time to stablise the grid, both by reducing electricity consumption from non-critical devices and by increasing contribution to the grid from storage assets. On April 15, 12 days after the initial earthquake, the grid in Taiwan was still recovering when another major power outage occurred. This time, the NOC dispatched 818 e-scooter charging locations, through its partner Gogoro, responding within five seconds to reduce energy consumption by 11MW for 30 minutes.
This is primary an example of how the energy transition is creating new infrastructure and opportunities that can be used to support the wider community in ways for which they were not originally designed.
A few thousand miles south, the Western Australian Wholesale Energy Market was hit with unprecedented temperatures during summer 2023/24, six days of which ranked among the 10 highest demand periods for energy in its history. Thermometers started soaring above 40°C in November, with multiple heatwaves continuing into February; making it the warmest summer since observations began in 1910.
Anticipating the need for extra energy reserves ahead of the summer period, the Australian Energy Market Operator (AEMO) procured additional reserve capacity. This included Enel X’s demand response customers, who curtailed their energy usage on 14 occasions to release pressure on the grid throughut the challenging summer conditions.
On the other side of the Pacific, the USA’s size and geography means that dispatch events can be triggered by extremes of both heat and cold.
The 2022 California heatwave and wildfire season saw a total of 7,667 recorded fires, affecting approximately 363,939 acres, destroying 772 structures and, tragically, resulting in the loss of nine lives.
Throughout the week of September 5, 2022, the state of California saw sustained high temperatures of up to 43°C. This caused grid demand, mainly from increased air conditioning usage, to skyrocket to over 52 gigawatts (GW) – a new record for the California Independent System Operator (CAISO).
To help balance the grid CAISO dispatched DR providers, including an Enel X portfolio of 100MW, for over 63 hours during a 4 day period.
Conversely, in late December 2022, during the midst of the holiday season, winter storm Elliott blasted a huge part of the United States – stretching from Colorado to the East Coast, and even affecting parts of Florida. For instance, Denver reached -31°C, the lowest in the city for 32 years.
Electricity demand spiked as heating demand surged and, at the same time, generation and transmission equipment struggled to operate at such temperatures. Natural gas wells and pipelines froze, restricting supplies to half their typical levels in many areas. Millions of households across the country lost power at some point during the storm.
Again, participating Enel DR customers made a significant contribution to helping the system regain stability, with grid operators dispatching 4,108 MW of Enel’s portfolio across 5,000 registrations in north eastern USA over 2 days.
Maintaining business as usual
On an average day, however, the NOC is more about ensuring that electricity systems continue to function as normal when more routine, but increasingly frequent, events occur. These include: power station repairs; interconnector outages; a mismatch between renewable generation forecasts and output; or even isolated surges during special events like the Olympics.
Collectively, the demand response assets managed through the NOC are known as a Virtual Power Plant (VPP). At 9GW Enel X’s is the world’s largest VPP, streaming live data for over 15,000 commercial and industrial sites across 14 countries and dispatching the required energy reduction or generation responses in real time. VPPs have become an integral part of global power systems in how they support multiple national grids, promote global inter-operability, enhance energy security and help advance the uptake of renewable energy.
A virtual response to very real challenges
Mention of a power plant might conjure up images of engineers in boiler suits checking dials, pushing flashing buttons and cranking large handles. A modern NOC couldn’t be more different, with a diverse team of operators in every day clothing, sitting at multi-screen workstations in an office environment.
While there is room for engineers in the NOC, its modern skill-set reflects the full breadth of today’s digitalisation, decentralisation and decarbonisation agenda. Enel X’s NOC in Dublin is led by former airline operations controller, Michael Lynch, and includes recruits from finance, trading, IT, security, customer care and retail backgrounds. Given its truly global nature the NOC also hosts a wide range of nationalities and languages – such as Polish, Italian, Mandarin and Portuguese.
With its intermediate timezone, cultural diversity, strong IT heritage and increasingly virtual skills base, Dublin proved to be the ideal location for Enel X’s NOC.
The detailed benefits of DR participation include:
- Advance notice of power outages – allowing companies to schedule their operations around any potential disruption and to protect their facilities from possible damage;
- Decarbonising energy supply – helping grids balance demand with more variable renewables supply, particularly by maintaining a constant frequency (typically 50 hertz);
- Helping the wider community – by ensuring that energy remains reliable and affordable;
- Avoiding the need to build or operate fossil-fuelled power stations – Enel X’s 9GW VPP is a clean, instantly-deployable and cost-effective equivalent to 10 of the UK’s latest gas-fired plants (e.g. Carrington, 884MW), or 20 of Ireland’s (e.g. Great Island, 464MW).
- A new and predictable revenue stream – DR programs pay companies that flex their energy use, storage and production;
As well as helping to stabilise grids and accommodate more renewable energy, many demand response participants reinvest the revenue earned into sustainability projects.
Increasingly, these payments for DR participants are being formalised through regulated global Capacity Markets. During a dispatch event, the NOC manages Enel X’s 9GW Virtual Power Plant both to help electricity systems function as normal and to enable commercial customers to continue participating in Capacity Markets.
Capacity Markets (CMs) work by providing payments to make sure there is enough reliable capacity to meet peak electricity demands. They act as an ‘insurance policy’ against possible power outages which may become more common if, for instance, climate events continue to increase or grid upgrades do not match the growth in variable renewable power generation.
CMs, in which forward capacity is traded, are distinct from traditional energy markets, in which the power source itself is traded – whether electricity, gas or oil. CMs are typically based on annual or six monthly auctions for delivery up to three years ahead.
Capacity Markets, although a relatively new concept, are truly global with examples as far afield as Belgium, Colombia, Italy, Japan, Poland, the USA and the UK.
In the UK the first auctions were held in December 2014, and the Capacity Market is the primary mechanism for securing sufficient electricity supplies to meet future peak demand. In the latest round, the National Grid will pay businesses that participate in the 2024/2025 Capacity Market season up to £65,000 for every megawatt (MW) that they enrol.
Embracing the new normal
In short, Enel X’s Dublin NOC is part of a global virtual safety net that few people are aware of, but that keeps the lights on for many millions of people and businesses when they need it most.
A flexible approach to energy management is the new normal and it is becoming an increasingly integral component of energy systems worldwide. By adjusting their demand in response to the needs of the grid, DR participants are helping to maintain grid, business and social continuity while paving the way for the critically important net zero transition.
As part of the Enel Group, Enel X has more than 50 years of experience in the energy business, and is both a global and local leader in VPP and DR services.
To find out how you could benefit from demand response and the capicty market please visit https://www.enelx.com/uk/en/contact-us
Michael Lynch
Michael Lynch is Manager of the Global Network Operations Centre at Enel X. He leads a talented team dedicated to enhancing grid reliability and supporting the global shift toward sustainable energy.
