Understanding the Role and Design Space of Demand Sinks in Low-carbon Power Systems

Abstract

As the penetration of variable renewable resources in the power system increases in the coming decades, periods of overgeneration and negative market prices will become more common. Intermediate flexible loads, or 'demand sinks', could be deployed in power systems to respond to low electricity prices, using that electricity to produce valuable output products. This study provides a general framework to evaluate any potential demand sink technology and understand its viability to be deployed cost-effectively in low-carbon power systems. We use an electricity system optimization model to assess 98 discrete combinations of capital costs and output values that collectively span the range of feasible characteristics of potential demand sink technologies. We find that candidates like hydrogen electrolysis, direct air capture and flexible electric heating can all achieve significant installed capacity (>10% of system peak load) within the feasible design space in the year 2050 or before. Including these technologies in the grid significantly increases the installed capacity of variable renewable resources like wind and solar, while not significantly affecting Li-ion battery storage or firm generating capacity, or the average cost of electricity.