The growing global need for power flexibilities

The electric power market is currently undergoing two major changes. The first one is at power generation side. In order to stem the tide of global warming, which is believed to be responsible for global climate change, there is a growing shift from conventional thermal power generation to renewable energy, which does not produce CO2. However, the amount of power that is generated from the two leading types of renewable energy – photovoltaic power and wind power – varies greatly depending on weather conditions, such as whether it is rainy or sunny. These renewable energy sources are clean, but they are extremely unstable as sources of electric power, and they still face major issues with respect to their ability to fully support society and peoples' lives.

The second change is from power consumers. Automation is becoming more prevalent in all industries, due in part to technological advances and to working force shortages resulting from the aging and shrinking population. The way power consumers use power is also undergoing major changes, as can be seen, for example, in the increasing use of electric vehicles as a more environmentally-friendly mode of transportation.

The two issues, the instability of renewable energy and the changes in power demands, are producing uncertainty in the electricity market. Unmatched supply and demand could, in the worst-case scenario, result in power outages.

To tackle these problems, it must be possible to absorb electric power uncertainty by adjusting the balance of supply and demand and controlling power frequencies. In the electric power industry, this is referred to as power supply and demand balancing capability, and the need for this capability is growing around the world.

In order to produce these capabilities, Toshiba has been at the forefront of efforts to create Virtual Power Plants (VPPs) (Fig. 1).

VPPs use IoT technology to bundle and control physically distributed energy resources such as photovoltaic power/windfarm and storage batteries located near the area where the power will be consumed, and make them function as if they were a single power plant. Creating VPPs requires electric system control technologies. Supply and demand control technologies are one of Toshiba's strengths, and we have fluctuation control technologies and power demand forecasting technologies* as well. Based on those technologies, Toshiba is targeting to create VPPs that can effectively control and operate diverse power plants and consumers’ facilities and equipment.

* Of the roughly 100 organizations that participated in Tokyo Electric Power Company Holdings, Incorporated's "First Electricity Load Forecasting Technology Contest," Toshiba achieved the highest forecasting precision and was presented the Best Award.

In order to meet the demands in the changing electricity market and realize both low-carbon society and the stable supply of electric power, Toshiba has been conducting negawatt aggregator business based on this VPP technology through co-creation with electric retail companies since 2017.

Digital transformation in the energy field

Negawatts are a conceptual unit of electric power that would otherwise have been consumed by power customers at their factories, plants, buildings, homes, or the like, but which has not been consumed because power saving measures have been implemented. They are considered to have the equivalent value of generated energy. Following the full liberalization of electricity retail sales, "negawatt trading," the buying and selling of negawatts, began in 2017. Negawatt aggregators issue power saving requests (demand response) to multiple power consumers in order to ensure power supply and demand stability, and using the total of saved power to balance supply and demand. To the consumers who save power in response to these requests, compensations are provided by ways of, for example, billing discounts. It is hoped that this groundbreaking service, which provides sufficient power supply and demand balancing capabilities to the electric power market and contributes to the security of peoples' lives and corporate activities, will become more widespread.

In fact, in January and February 2018, cold waves in the Tokyo metropolitan area placed severe pressures on power supply and demand, so Toshiba issued 11 demand response requests to multiple contracted power consumers. Five of them were issued on consecutive days. Situations demanding electric power supply and demand stabilization are already occurring.

An important part of this negawatt aggregator business is the ability to accurately assess how much power savings to request, when to issue those requests, and who to issue the requests to, based on supply and demand forecasts for the day and the power-saving capabilities of the power consumers. Toshiba has its own dedicated operation center, where we use the IoT to collect power usage status information from devices on power consumers' premises in one-minute increments. We perform central control for management of diverse information related to power usage and savings, calculation of allocations for power saving request and issuance of requests, to realize high-accuracy negawatt aggregation.

Keys to this are our technologies to accurately determine the saving capability against the amount of power needed, without cutting too much nor too little. The methods used to save power and the amount of power saved vary depending on the industry, business format, controlled devices, and facilities used by individual power consumers, as well as other factors such as the day of the week, the time of day, and weather conditions. While some consumers may not reach their contracted saving amounts, others may save more than their contracts. The amount of time it takes from requesting power savings to actually being saved (immediacy) and the duration of power savings also differ. Toshiba statistically processes the information gathered in the operation center and performs detailed management of the characteristics by individual consumers. We have created algorithms for calculating the optimal allocation of power savings, based on conditions such as day of the week and time of the day, to meet required power saving levels. We are continuously refining the precision of these algorithms through our day-to-day operations. We use this portfolio management technology, which enables optimally combining power savings for multiple consumers through assessing the balance of supply and demand in real time, and constantly improve our technologies for accurately achieving necessary power savings.

Flexible response to the changes in the electric power market

Furthermore, Toshiba is also conducting verification using storage batteries with the aim of achieving more immediate supply and demand adjustment.

When power savings requests are made to power consumers, it takes some time before actual power savings begin. However, storage batteries can be used to enable more immediate response. Storage batteries can be used in many ways, such as efficiently absorbing surplus power generated from renewable energy sources and leveling out power generation amounts, serving as power sources when supplies and demand is tight. Here, as well, Toshiba has developed storage battery control technologies that support efficient charge and discharge for multiple purposes, utilizing the technologies of data collection via the IoT and analysis. More and more power consumers are expected to install photovoltaic power generation systems in the future. Toshiba is striving to optimize the use of storage batteries and achieve high precision power supply and demand balancing capabilities by formulating optimal storage battery operation plans that factor in power usage levels and power generation amounts, and by carrying out corrective operation (Fig. 2).

However, there are major challenges to rolling out the VPP business. The electric power market is undergoing drastic reformations such as separation of power generation and transmission operator scheduled in 2020, and new balancing markets to be established in or after 2021. The flexibility to accommodate the dynamically changing market system designs brought about by these reformations will be the key.

Toshiba is shifting its focus to agile development for its systems and services, which enables to accommodate these changes more flexibly. Our approach is to analyze the raw data that constantly streams into our operation center, carry out improvement activities, and provide services optimized to current needs. In the future we also plan to use automation and autonomization based on technologies such as AI (Artificial Intelligence) to supply comprehensive energy services that encompass entire communities, providing peace of mind to both power suppliers and all of consumers and enabling them to focus on their own business activities.

Toward the co-existence of both expansion of renewable energy and stabilization of electric power supplies. We are accelerating our efforts to realize digital transformation in the energy field.