How much can we save? Upper bound cost and emissions benefits from commercial and industrial load flexibility

TL;DR

This paper quantifies the potential cost and emissions savings from load flexibility in commercial and industrial sectors, highlighting variability across regions and seasons, and providing a framework for valuing flexibility benefits.

Contribution

It introduces a top-down approach to estimate the upper bounds of flexibility benefits based on load and system characteristics, aiding decision-making and policy design.

Findings

Cost savings from flexibility range from 0 to over 100% depending on region and season.

Emissions savings are typically between 5% and 40%.

Emissions abatement potential varies greatly and can be much lower than renewable energy credits or social cost benchmarks.

Abstract

Load shifting by commercial and industrial power consumers reduces costs and Scope 2 emissions for the consumer and the grid. Incentivizing this behavior requires tools for valuing flexibility amidst the heterogeneity in load characteristics across diverse sectors and the spatiotemporal variation in electricity prices and emissions factors. This work presents a top-down approach to screen and broadly understand the benefits of flexibility based on system uptime, power capacity (PC), energy capacity (EC), and round- trip efficiency (RTE). Depending on the region and season, cost savings from flexibility range from 0 to over 100% and emissions savings are generally bounded between 5-40%. We also find the magnitude and cost of emissions abatement from flexibility is highly variable and, in some cases, up to four orders of magnitude less than regional renewable energy credits or common investing or policy benchmarks like the social cost of carbon. While the value of flexibility is highly dynamic, estimating savings as a function of load characteristics and incentives can inform heuristic design of new systems, siting strategies, comparison of flexibility to other decarbonization options, and new avenues for incentivizing flexibility.