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

Abstract

As wind and solar penetration increases, electricity systems will experience common periods of overgeneration and low prices. A variety of flexible electricity loads, or ‘demand sinks’, could be deployed to use intermittently available low-cost electricity to produce valuable outputs (also known as ‘Power-to-X’). 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). Demand sink technologies significantly increase installed wind and solar capacity, while not significantly affecting battery storage or firm generating capacity, or the average cost of electricity.