Using Commercial Freezers to Balance the Grid in Australia

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In the ongoing quest to move to a more stable grid, one underpinned by renewable energy, all options are being considered, whether it is the humble home hot water system or even commercial freezers. As one of our readers commented, “Brilliant, low hanging fruit. Bring it on.” In many ways this is similar to how the grid has been balanced for years, with coal-fired power stations operating overnight. Just, now, we have the excess power during the day — the solar duck!

To illustrate, a quick check of the National Electricity Market widget tells me that at 10:00 am in summer (today) Queensland alone is producing 3.7 GW of power from solar — more than half of the grid output. Over 17 GW is being produced across the country. Powering supermarket freezers with all this sunshine is a part of the solution — along with intelligent hot water systems, a range of battery options and car charging times.

The Australian Renewable Energy Agency (ARENA) is providing AU$3.7 million (that’s about $2.3 million US dollars) to Enel X (does Elon know that they are using his X?) to run their “Unlocking Flexible Demand in the Commercial Refrigeration Sector” project. Enel X aims to demonstrate that flexible demand solutions in commercial and industrial refrigeration can be scaled and used for grid stabilisation. To do this, they are seeking 440 supermarkets and 13 refrigerated warehouses. They expect to be able to aggregate 21 MW of demand across the National Electricity Market (NEM).

Enel X is setting up a virtual power plant (VPP) to support the NEM by eliminating grid constraints, providing a reliable supply of electricity coupled with financial benefit to the consumer. Enel X estimates that there is 500 MW “potential flexible demand in refrigeration across Australia’s supermarkets, grocery stores, beverage shops and warehouses.” It just needs to be managed intelligently to smooth out grid demand for electricity. This can be done by time shifting demand for power to commercial freezers from peak times with low solar output (evenings) to times of low demand and high output (the middle of the day). Demand response should lead to reliable energy at a reasonable cost.

As the pieces are put together, a complete energy solution will emerge. I am reminded of Al Gore’s 2006 model from his documentary An Inconvenient Truth. We don’t need one massive solution, but the combination and smart use of many — minor solutions. If you haven’t seen the documentary, I would highly recommend you have a look at it. You can watch the trailer on YouTube here.

Jeff Renaud, Managing Director of Enel X APAC, noted that “The energy market needs new ways to balance renewables, and businesses need new ways to reduce energy costs. With ARENA’s support, we will prove that small-scale refrigeration systems, when plugged into a Virtual Power Plant, can make a large-scale contribution to the renewable energy transition.”

Even when commercial freezers and chillers are switched off, the thermal mass of facilities maintain the temperature. Aggregating small changes to power usage can have a large impact without effecting service delivery. Thus, they can act like a battery. Enel X has already engaged with a Tier 1 grocery chain starting a 20-store pilot project. No, madam, your chicken will not thaw out as we change the hours of operation of our freezers. The frozen peas will remain frozen overnight. No one will notice any change.

Enel X expects to extend participation in this virtual power plant program to up to 250 stores. Enel X is the energy storage and services business of Italy’s energy company Enel.

“Enel X Australia combines innovative technology with the infrastructure and expertise of a global leader in renewable energy, to help businesses unlock new revenue streams from their energy assets. Our team is passionate about making it simple for commercial and industrial users to identify, develop and monetise flexible demand in their operations. This reduces energy costs, strengthens the grid and supports Australia’s transition to renewable energy.”

Lineage Logistics, a global refrigerated food supply company, is also taking part in the project by integrating 13 refrigerated warehouse sites. They describe themselves thus:

“At Lineage, we play a vital role in protecting one of the world’s most valuable resources — food. As the largest dynamic temperature-controlled warehousing and logistics company, we are reimagining the global food supply chain to fight food insecurity and eliminate waste at our facilities around the world.

“We partner with food and beverage companies to help make the cold chain more efficient, sustainable, reliable and, most importantly, to feed the world. We’re working with our customers to help feed communities in need and eliminate food waste. A more connected food chain is possible, and we’re living our purpose every day to make it happen.”

In 2019, Lineage was awarded the Better Practice Award from the US Department of Energy. “We are entrusted with ensuring that billions of pounds of food across the United States and the globe are kept at optimal temperatures throughout the supply chain, and we are obsessed with finding new ways to do this even more safely and efficiently than has ever been done before,” said Michael J. McClendon President, Lineage Europe & EVP, Network Optimization.

“Better Plants partners such as Lineage are implementing innovative energy efficiency solutions in the industrial space that are cutting costs and energy-use and the Better Practice Awards honor their leadership,” said Valri Lightner, DOE Advanced Manufacturing Office Acting Director.

“Lineage’s flywheeling technology minimizes energy costs and increases utilization of renewable energy sources by precisely timing electricity consumption. It determines when peak demand for energy usage will occur and avoids the relevant periods by super-cooling the warehouse in advance. Lineage’s algorithms rely on advanced physics, mathematical optimization, large-scale sensor deployments and machine learning to accurately quantify how each building interacts with its environment and optimize accordingly.”

Looks like the partnership of ARENA, Enel X, and Lineage is a perfect fit.

ARENA CEO Darren Miller said “Our electricity grid is changing, and a more variable supply requires more flexible demand. Commercial freezers can unlock this opportunity at a material scale, so we’re excited to see the Enel X project rolled out across Australian supermarkets and other businesses with refrigeration. We want to see projects like this demonstrate the benefits of flexible demand — to individual electricity users and all users via a more efficient grid. By demonstrating and proving the technology to prospective users, we’re hoping to see increased uptake as electricity users look to it as an attractive option.”

Enel X has published its first “Lessons Learnt” report. You can read it here.

The joint Enel X and Lineage project is showing that flexible demand can be “an increasingly viable alternative to network infrastructure and large-scale batteries and can balance supply and demand more efficiently and cost-effectively. The Australian electricity market now allows commercial, industrial or institutional organisations to offer their capacity to support the electricity grid in exchange for regular payments.

“The commercial sector has been an early adopter of distributed energy resources such as energy efficiency and rooftop solar. Despite this, the sector has been slow to embrace flexible demand due to prohibitive costs, relatively less economies of scale (compared with the larger industrial sector), the requirement to upgrade and centralise control systems and lack of demonstration projects showing that participation is possible without compromising operations.

“Commercial sectors with refrigeration infrastructure are well suited to flexible demand due to inherent thermal inertia and fast-responding assets but are currently not incentivised to maximise their use of this flexibility.”

The lessons learnt in the retail refrigeration space include: lower cost metering is needed to allow smaller sites to participate; consumers are at different levels of readiness and have different requirements to participate in flexible demand programs; resource quantity (kW) needs to be sufficient to develop a viable business case for participation; small capacity refrigeration sites will generate the revenue forecast at the onset of this project, including through “Wholesale Demand Response Mechanisms” and “Frequency Control Ancillary Services.”

In the refrigerated warehouse space, the retail model has been successfully incentivised and is delivering daily load shifting for Lineage’s commercial freezers.

It looks like the collaboration with Lineage is off to a flying start, whilst there are still some teething problems with the smaller shopping centre refrigeration sites.

“Though it has been common that sites require additional optimisation to achieve flexibility, the project is now mature and participants educated on requirements and process. Much of the work to date has related to solution development to professionally manage customer risks and to facilitate accelerated deployment, whereby continued implementation will serve to increase the demonstration of flexible demand technically and commercially.”

The “Unlocking Flexible Demand in the Commercial Refrigeration Sector” project is due to be completed in 2027 — another step in the renewable energy journey. I’m looking forward to more news of its success.