Energy flexibility: powering business, supporting the grid, activating new cash flows

Adjusting demand to stabilize the electrical grid and receive compensation in return: what does this mean and how do we do it? The key is energy flexibility.

Stabilizing, generating, and maintaining balance – all by using instability. Or better, advancing our ability to manage instability. What am I talking about? Energy, obviously. More specifically – a concept that has been on the radar for insiders, but is less obvious to those who know energy only because – or mostly because – they use it. But look out: helping keep the balance of the electrical grid could mean activating new and pleasantly surprising cash flows.

I’m talking about the concepts of energy flexibility, Demand Response, and the search for a balance between supply and demand. This issue is now more critical than ever in guaranteeing stability for the electrical grid, and is the perfect response to multiple consumption needs. And this search involves all the players in the energy system: no longer just energy producers, but those who consume it, store it, and are able to “return it” to the grid as well. And so can be compensated.?

The role of Demand Response in grid investments

In the Zero Emissions scenario, given the gradual electrification of end-uses and the increase in number of renewable energy plants, we are witnessing a growing demand for electricity. A demand that “weighs” on the grid and obviously has an impact on transmission and distribution infrastructure. Grids, as well as the measures aimed at strengthening them and making them stronger and smarter, are therefore increasingly critical for the transition to clean energy. ?

By 2030, if we want to achieve the objectives of the 2050 Agenda on climate and energy sustainability, electricity use worldwide will have to increase by 20% over the previous decade. This is according to an IEA report from October 2023, Electricity Grids and Secure Energy Transitions, on the role grids play in the paradigm shift we are now seeing. In this scenario, grid expansion and diversification is key to supporting decarbonization, guaranteeing electricity supply, and effectively integrating renewable sources. By 2040, countries around the world will have to add or renew a total of more than 80 million kilometers of grid.

Thanks to Demand Response, these investments can be contained. A significant initiative in this respect was implemented in New York, the world’s most energy-intensive habitat. Among the initiatives undertaken as part of the Big Apple’s Reforming the Energy Vision (REV) plan, the energy efficiency and load reduction program called Brooklyn-Queens Demand Management (BQDM) made it possible to avoid overloading the Brownsville substation, which would have needed a 1.2-billion-dollar upgrade to handle the stress created by the expected overload. All by integrating distributed technologies into the grid and supporting everything with Enel X’s DER Optimization Software and a demand-side management program to optimize substation load management by combining solar energy, fuel cells, building load, and batteries.

How to adjust energy demand

Electrical grids have always been based on a one-way flow, from producer to consumer, and on the classic market logic of supply and demand (if demand grows, supply must be increased).

Today, we are moving toward a more sustainable and circular paradigm, based on the logic of demand that can be adjusted and adapted to supply. In this paradigm, consumers – individuals, public administrations, and especially businesses – become main players together. Digitalization now allows companies to adjust their energy demand according to grid requirements, reducing it, for instance, when the grid is overloaded, and putting surplus energy from their assets on the market in exchange for compensation.

This is the simple and useful mechanism at the foundation of Demand Response programs, which we at Enel X Global Retail are among the world’s leading supporters of, and which are now a pillar in our offering for B2B.

A growth strategy based on sustainability

DR programs are not only a useful tool for responding to the growing demand for electricity, improving grid stability, and managing the impact of renewables. They are also an advantageous solution for businesses wanting to increase their profits using sustainability, and for grid operators, who save on the expenses required to install new capacity.

At Enel X Global Retail, we’ve accumulated significant expertise in this field, becoming a go-to partner that offers businesses targeted consulting and points them toward the best solutions. Enel X Flex is a cloud platform created by Enel X that provides C&I customers with various services to optimize consumption, maximize efficiency, and empower flexibility in an even more straightforward way.

DR programs are perfect for many different kinds of businesses. The only requirement is that companies be able to adjust, that is, reduce their consumption at certain times. Any company that does not use continuously operating machinery, for example, can participate. Enel X Flex protects the continuity of operations first and foremost, while guaranteeing participation in the best demand response programs, allowing companies to receive compensation in exchange for their surplus energy.

The energy concealed in the cold

United States Cold Storage, a leading American cold storage logistics company, was a pioneer in participating in the Demand Response programs provided by Enel X Global Retail. 15 years ago, the company, which used significant quantities of energy to support its core business, understood the program’s potential, entering into a partnership and quickly expanding it to over 20 distribution sites in the continental United States.

Participating in DR programs allows the company to save energy at times with lower activity levels, with no risk to the operations of the refrigeration equipment, and guaranteed an economic return of about 4 million dollars through 2022.

Demand flexibility appears to be the ideal solution for the massive industry of commercial refrigeration. Last July, Enel X Australia received financing of 3.7 million dollars from the Australian Renewable Energy Agency (ARENA) to support demand flexibility solutions in the refrigeration sector. ?

There is an immense energy treasure trove hidden in cold storage that can be used be used: in Australia alone, it is estimated that over 500 MW of potential flexible demand can be fed back into the national electricity market. Through the "Unlocking Flexible Demand in the Commercial Refrigeration Sector" program, Enel X Australia is recruiting 440 commercial refrigeration plants to supply the flexible demand capacity needed to support the renewable energy transition.

Small changes in energy use can have a huge impact if aggregated at scale, without obvious changes for users or, more importantly, any impact on product quality. Decarbonizing the grid, avoiding costly investments to modernize, and earning from the energy made available. Demand Response is the most surprising and immediate ally for achieving Zero Emission goals. For a business that is sustainable twice over.