ESS as Active Demand Management for Customers

By smartgrider In DEMAND SIDE MANAGEMENT Posted 2015-05-14


Market structureHybrid structure of vertically integrated and single buyer utility, KEPCO. KEPCO owns, installs and maintains all meters.
Number of retail customers 50 million
Electricity consumed- 2011443.4 TWh
Peak Demand for Power- 2011 73,137 MW
Net Revenue to Distribution-
Distribution Network Over 600V: 209,604 km
Under 600V: 225,945 km
AMI Roll outYes
Contact Dr. DJ Kang , djkang@keri.re.kr
Dr. Kary Song, karysong@keri.re.kr
Korea Electrotechnology Research Institute [ KERI ]

Korea – Regional electricity system context / Key Figures

ESS as Active Demand Management for Customers

Traditional demand side management (DSM) has required the electricity load of customers to be directly interrupted or adjusted in order to reduce the consumption or to change the consumption pattern of the users. Recent technical progress, gradual changes in electric power policy and industry environments have positioned distributed energy resources as a prospective option for demand side management. Particularly, with Korea’s strong promotion policy on the energy storage industry, energy storage systems (ESSs) have proven to be an important asset for demand management. Among a variety of DSM programs implemented in Korea, ESSs can be effectively utilized under the following programs.

  • Time-Of-Use (TOU) electricity tariffs
  • Load management programs: advance notice, designated period, emergency load reduction
  • Electric power demand resource market

The Korean government has initiated various demonstration projects and deployment projects of ESSs for demand side management. This case introduces the ESS deployment project which has been promoted as a part of the “Smart Grid Deployment Support Project”. The purpose of the Smart Grid Deployment Project is to improve the power consumption profile through the deployment of ESSs and AMI (Advanced Metering Infrastructure), to overcome the limitations with the current one-way method of providing energy information and managing the electricity system.


Objectives & Benefits


  • Improvement of electric power consumption patterns through ESS and AMI deployment (Deployment target: ESS 11MWh, AMI 12,000 units)

Benefits (expected results)

  • Effective use of energy such as electricity demand reduction, peak load reduction, power quality improvement, etc. through deployment of key Smart Grid devices such as Advanced Metering Infrastructure (AMI) or Energy Storage System (ESS), etc
  • Preparing infrastructure, accelerating revitalization of related Smart Grid industry and contributing to raising awareness of Smart Grid by building up Smart Grid at an early stage
  • Providing various power portal services and enabling direct control of consumers load using the existing IT network
  • Opening up domestic ESS markets and encouraging voluntary customer engagement
  • Contributing to stabilization of power supply/demand

Deployment target: Deployment of ESS 11MWh and AMI 12,000 units

Budget: 17.8 million USD (Ministry of Trade, Industry and Energy) + 5.9 million USD (Project participants)


DSM through ESS and AMI deployment

Figure: Demand side management through deployment of ESS and AMIProject Design

  • The system operator collects system data from individual customers and provides services and controls to the customers over a wide area network.
    • Each customer measures and sends its own system data to the system operator
    • The EMS of the system operator analyzes the collected data, offers energy information services, and sends control signals to the customer EMS or connected demand response devices
    • The market operator(Korea Power Exchange, KPX) opens the DSM market and determines the DSM required and the market price for those resources
    • The customer EMS responds to the controls signals from the system operator EMS and operates either the ESS or adjusts its load

Key Smart Grid devices to be deployed for DSM

  • ESS: power conditioning system, battery, power management system, battery management system, etc.
  • AMI: meter (G-Type), energy information service (Web, Smart phone application etc.), Smart Plug, data concentration unit/access point, meter data management system, etc.
  • EMS: energy management system server, demand response management system, etc.


Business options

The project explored several different business model and business case options before deciding which system architecture would be most appropriate to test.

  • ESS only, AMI only and Package of ESS and AMI
  • ESS only
    • installation of ESS including battery, BMS, PCS and PMS
    • charging/discharging operation for demand management of customers
    • providing operation, management and control services to the system operator and customers
      (e.g. manual mode, semi-auto mode, auto scheduling mode, etc.)
  • AMI only
    • installation of AMI including meter (G-type), EIS, DCU/AP, MDMS
    • collecting and processing energy information of customers
    • providing operation, management and control services to the system operator and offering various energy information services to customers  through web and smartphone applications
  • Package of ESS and AMI:
    • Combining “ESS only” and “AMI only” options

Figure: Business options for smartgrid deployment project


Current Status & Results

The project deploys ESS in connection with AMI to increase the demand response capability in Korea’s power system. The pro implementation began in 2013 following the completion of the Jeju island demonstration project. The major cities on the mainland are the priority targets for the implementation projects. By 2020 the AMI deployment process is to be complete according to the national Smart Grid roadmap. The deployment is planned to spread to the entire country by 2030.


Lessons Learned & Best Practices

As this project is still in the early stages of implementation at the time of writing there are a number of lessons yet to be learned and best practices yet to be established. There have been a number of lessons learned through projects leading up to this one which have been incorporated into the project design. They are described briefly here.

  • Deployment should be planned in the context of current pricing, regulation and standards in place or under development.
  • Pricing, regulations and incentives should be prepared to bring revenue to customers through the business models in deployment projects.
  • Voluntary customer engagements are essential to deploy active DSM technologies.


ESS Deployment Policy

The Korean government released an ESS deployment policy with targets for energy storage capacity along with the Smart Grid roadmap.

  • Deployment target

  • Deployment Road-map


Key Regulations, Legislation & Guidelines

ESS Related Laws taken into account

  • The Electric Utility Act requires ESS to be included with generating resources
  • Mandatory installation of ESS in proportion to renewable power generation capacity
  • Mandatory installation of ESS in public institutions

Electricity tariffs

  • Extending TOU rate system into general/industrial customers of contracted capacity 100kW or more (May, 2013)
  • Implementing an optional critical peak price system with general/industrial consumers (July-August, 2013)
  • Considering various tariff options from which customers can select the most suitable option for their electricity usage patterns and which will also contribute to stable electric power supply and demand balance.

Domestic incentive based DSM programs



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