Reduction of Peak AC Demand

Executive Summary

Air conditioning (A/C) is one of the most expensive end-use types for utilities to serve. This is primarily because a significant portion of A/C operates for a relatively small amount of time during the year. As a result, 10% to 20% of the utility capacityThe rate at which equipment can either generate, convert or transfer energy1. Energy is the potential of a physical system to perform work. (A common unit of work is foot-pound—the amount of energy needed to lift one pound up a distance of one foot.) Energy exists in several forms such as electromagnetic radiation ....generationThe manner in which electricity is generated. The electricity that flows through California equipment, transformers and wires – is used for only a few hundred hours per year (1% to 2% of the year). Such low asset utilizationThe extent to which an asset is used relative to the maximum amount of use that is possible. For example, an asset that could be used throughout he entire year and that is only used during half of the year has an asset utilization of 50%. Another... is important because the cost for the capacity needed to serve A/C demand1. The rate at which electricAn adjective meaning “needing electricity to operate” such as electric motor or wire. IEEE: Containing, producing , arising from, actuated by or carrying electricity. energy is delivered to or by a system or part of a system, generally expressed in kilowatts or megawatts, at a given instant or averaged over any designated interval of time. 2. The rate at which energy is being used by... is spread across relatively few units of energy (delivered), which can have a significant effect on the utility cost-of-serviceThe total cost incurred by the utility to generate, transmit and deliver electricity and to provide customer service.

A/C demand tends to occur when overall demand for electricity is already high; therefore, it requires use of the most expensive, least efficient and most polluting electricity generation (e.g., simple cycleOne sequence of storage charging and discharging. Also known as charge-discharge cycle. combustion turbines). TransmissionAn interconnected group of lines and associated equipment for the movement or transfer of electric energy between points of supply and points at which it is transformed for delivery to customers or is delivered to other electric systems. and distributionThe practice of and infrastructure for distribution of electricity to end-users by utilities. Typical voltages range from 12 to 138 kiloVolts (kV) (T&D) energy losses are most significant when A/C is used because that is when electrical1. An adjective meaning “pertaining to electricity”. Electrical Engineer. 2. Related to, pertaining to or associated with electricity but not having its properties or characteristics. equipment is most heavily loaded and when ambient temperatures are highest. It is also notable that small A/C compressor motors pose an important challenge during grid-wide voltage emergencies because they draw an increasing amount of electric current (Amps) as the voltage (Volts) drops to maintain their powerThe rate at which energy is generated, converted, transmitted, distributed or delivered. draw (electric power = electric Voltage x electric currentFlow of electrons. The common metric is ampere or amp. – Volts x Amps). 

Distributed electricity storage systems (DESS) used to serve or to offset A/C-related demand provide significant benefits – primarily related to a reduced need for generation and transmission and distribution (GT&D) capacity (equipment). This is especially important for areas or regions experiencing electric supplyA source of electric energy and/or capacity, possibly including generation facilities and purchases. shortages or transmission congestion. Other potentially important benefits include increased asset utilization of baseload or intermediate duty generation and existing T&D equipment. The same storage could also be used to offset the need for some ancillary services, especially voltage support, and it could improve local electric service reliabilityThe degree of performance of the elements of the bulk electric system that results in electricity being delivered to customers within accepted standards and in the amount desired. May be measured by the frequency, duration and magnitude of adverse... and power qualityA measure of the level of voltage and/or frequency disturbances..


In many regions of the United States (U.S.), A/C use comprises a significant portion of peak demandThe maximum power draw from end-user loads during specified times. For example, most utilities experience peak demand during hot summer afternoons.. Although circumstances vary among regions and locations, A/C accounts for 10% to 20% or more of summer peak demand (May-October). That A/C related demand is quite expensive for utilities to serve, primarily because the capacity needed to serve A/C-related demand is only used for a small portion of the year, so very few units of energy are generated and delivered by that capacity (i.e., only a few kilowatt-hours of energy per kilowatt of GT&D capacity).

Two Approaches

There are two fundamental approaches to address A/C demand using storage. The first is use of electricity storage to provide power directly to A/C systems (in lieu of using electricity directly from the grid) to generate the cold when needed. Second is the use of “thermal” storage – in this case, storage of cold – in the form of chilled water or ice. 

Thermal energy storage (TES) is used to: a) generate and store cold at night and b) deliver the stored cold in lieu of generating the cold during the hot daytime hours with an air conditioning system. Cold storage is not new. It is used regularly for cooling in larger buildings. The systems tend to be relatively large and they tend to be one-of-a-kind. However, more modular versions are available as well. 

Both approaches reduce or eliminate the need to generate cold real-timePresent time as opposed to future time. (From Interconnection Reliability Operating Limits standard.), during peak demand periods, when electric energy and power are expensive. Operation of GT&D equipment is also most energy efficient at night when ambient temperatures are coolest. Similarly, regarding TES, generating cold at night when ambient temperatures are lowest – rather than generating it when the cold is needed and when ambient temperatures are hottest – enables more efficient cold production.

A/C-Related Electric Demand and Utility Asset Utilization

Perhaps the most important facet of the storage for air conditioning value propositionOne or more individual benefits associated with a specific use. A value proposition is said to be attractive if the total value of all benefits exceeds all costs, including required return on investment, if any. is the effect on utility GT&D asset utilization. To understand this point, it is helpful to depict the phenomenon graphically. Consider Figures 1 and 2 below. The plots shown are actual “load duration curves” for a specific electrical distribution node located in the coastal mid-Atlantic region of the U.S. (A loadAn end-use device or an end-use customer receiving electric power and using electric energy from the electrical system (grid). Note: The term load is sometimes treated as a synonym for demand, which is the measure of power that a load receives or... duration curve depicts every hour of the year arranged based on demand, from highest demand to lowest demand throughout the year.) 

Figure 1 depicts all 8,760 hours of a given year. Over the course of the year, the equipment is used 29% of the time (“load factor”). The red circle in the upper left portion of the figure indicates the part of the load duration curve where peak demand occurs.

That portion of the same load duration curve is shown below in Figure 2. More specifically, Figure 2 shows hourly demand levels during 2% of year – those hours when peak demand occurs. As shown in Figure 2, about 20% of the entire distribution capacity is used for about 1% of the year. Said another way, about 20% of the distribution capacity is used only 1% of the year. Worse yet, in the example, 10% of the distribution capacity is used for about 0.4% of the year. 

It is important to note that the load duration curve depicted in Figures 1 and 2 is for a single node with the utility’s distribution system. While the impact of A/C on transmission capacity asset utilization is somewhat less dramatic, and even less so for electricity generation capacity, the effect is important with regard to for generation and transmission capacity as well. 

Storage for A/C increases asset utilization in three ways. First, it reduces or eliminates the need for GT&D capacity “on the margin” to serve the peak demand. Second, because the storage is charged during off-peakThose hours or other periods defined by NAESB business practices, contract, agreements, or guides as periods of lower electrical demand. hours – when GT&D capacity is underutilized – more energy is delivered to end-users using the same amount of GT&D capacity. Third, by generating, transmitting and distributing electricity at night, when doing so is more efficient, reduces the amount of capacity needed to deliver each kilowatt-hourA measure involving one thousand watts being generated, transmitted, distributed or used continuously for one hour. The kiloWatt-hour is perhaps the most common unit of electric energy; it is used by utilities for billing. (Note the difference between... of energy.

Voltage Support

Small A/C motors pose significant challenges when the grid is experiencing a “voltage emergency” (i.e., when, for one or more reasons, the grid voltage is dropping to unacceptable levels). Voltage emergencies are at the root of many grid-wide electrical service outages. Specifically, during grid-wise voltage emergencies, small A/C motors draw increasing amounts of current as the voltage falls. The same motors pose a relatively significant challenge as the grid is re-energized after outages because those motors require a surgeA transient variation of current, voltage, or power flow in an electric circuit or across an electric system. (“in-rush”) of current to start up. 

Consider one operational scenario: Distributed storage is used to serve small A/C equipment under normal grid conditions. If there is a grid-wide voltage emergency, then the storage responds like other demand responseReductionA chemical process that results in the acceptance of electrons by an electrode’s active material. The opposite of oxidation. of retail electricity end-users’ electric load (power draw) in response to control or price signals. DR resources are deployed and used in lieu of installing/operating peaking generation capacity. resources by turning off the A/C equipment. If additional power is needed to stabilize the grid, then electricity storage can provide power to the grid. If the storage system has reactive powerThe portion of electricity that establishes and sustains the electric and magnetic fields of alternating-current equipment. Reactive power must be supplied to most types of magnetic equipment, such as motors and transformers. It also must supply the... capability then the storage system could also provide “reactive power” which can also offset grid-wide or even localized voltage problems.


Using electricity or thermal energy storage in conjunction with smaller A/C ‘package units’ is a compelling value position for several reasons. Most importantly: 1) A/C loads comprise a significant portion of electricity peak demand; 2) many A/C loads only operate for a few hundred hours per year, meaning high cost and low GT&D asset utilization; 3) small-to-medium sized motors used for A/C compressors pose an especially difficult challenge during and after grid-wide voltage emergencies by exacerbating regional power outages; and 4) storage used to serve A/C loads could be available for most of the year for numerous other benefits. 

Most benefits are related to: 1) reduced need for new GT&D capacity to serve peak demand (especially in areas experiencing electric supply shortages or transmission congestion) and 2) increased utilization of existing GT&D capacity. Other benefits include reduced T&D energy losses which: a) reduces fuel use and b) reduces the need for GT&D infrastructure by as much as 8%. The same storage used for on-peakTimes when demand for electricity is highest (a.k.a peak demand). Typically on-peak times occur during weekdays during the hottest summer months, when normal demand is high and when air conditioning is operating. Similarly, in some areas on-peak times... A/C could offset the need for some ancillary services, especially voltage support. It could also be used to improve local electric service reliability and power quality. Storage for smaller A/C loads could also be an important element of a robust, responsive and flexible Smart GridCollectively; devices, practices and protocols that enable rich monitoring and situational awareness and flexible and robust control of various parts of or entire power systems under varying conditions. Among other objectives, Smart Grid is expected to... and/or demand response (DR) program implementation. Finally, storage used to manage on-peak A/C could also be an important element of the utility’s integration of distributed/rooftop photovoltaics and bulk wind generation.