GRID FLEXIBILITY: METHODS FOR MODERNIZING THE POWER GRID

This report by Energy Innovation examines the necessity of grid flexibility to integrate increasing shares of variable renewable energy. It details short-term operational improvements, long-term planning strategies, and various physical and market-based resources—such as demand response and energy storage—that can balance supply and demand dynamically.

• Grid flexibility is becoming increasingly critical as variable clean energy sources grow in the electricity mix, particularly in regions like Hawaii and California where renewable shares have reached or exceeded 20 percent.
• Low-cost operational improvements can enhance flexibility without new physical infrastructure. These include shortening dispatch intervals to 'sub-hourly dispatch' (sometimes every five minutes), improving weather forecasting for two- to six-hour intervals, and consolidating balancing areas to reduce variability across wider geographical regions.
• Demand response is a powerful flexibility tool that allows the grid to manage demand based on supply scarcity or surplus. In the United States, PJM has seen overall prices drop by approximately 85 percent in one year after allowing demand response in its capacity market, and now procures about 10 percent of its resource needs this way.
• Physical resources providing flexibility include fast-ramping natural gas plants, hydroelectric plants, and upgraded coal plants. Energy storage, including pumped hydro, compressed air, and batteries, also provides flexibility; battery costs have decreased by nearly 80 percent over the last five years.
• The Electricity Reliability Council of Texas (ERCOT) piloted a Fast Frequency Response (FFR) market product to address the decline in system inertia caused by the increase in asynchronous wind generation. The pilot, which used 37 MW of battery storage and 100 kW of electric vehicles, resulted in a 37 percent improvement in the rate of change of frequency during loss-of-generation events.
• The California Independent System Operator (CAISO) introduced a Flexible Ramping Product (FRP) to manage the 'duck curve' effect, where high renewable penetration creates steep ramping requirements. Projections for March 31st between 2012 and 2020 suggest that by 2020, 13 GW of capacity may need to come online within three hours.
• Long-term flexibility planning can be achieved through mandates, such as California's 2013 law requiring investor-owned utilities to procure 1,325 MW of energy storage by the end of 2024, or through 'staircase capabilities' markets that use iterated, small-volume procurements for specific system needs over 10 to 20 years.

APA

Aggarwal, S., & Orvis, R. (2016). GRID FLEXIBILITY: METHODS FOR MODERNIZING THE POWER GRID. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Grid-Flexibility-report.pdf

Chicago

Aggarwal, Sonia, and Robbie Orvis. GRID FLEXIBILITY: METHODS FOR MODERNIZING THE POWER GRID. Energy Innovation, 2016. https://energyinnovation.org/wp-content/uploads/Grid-Flexibility-report.pdf.

Wikipedia

{{cite report |last1=Aggarwal |first1=Sonia |last2=Orvis |first2=Robbie |title=GRID FLEXIBILITY: METHODS FOR MODERNIZING THE POWER GRID |publisher=Energy Innovation |date=March 2016 |url=https://energyinnovation.org/wp-content/uploads/Grid-Flexibility-report.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{aggarwal2016grid, author = {Aggarwal, Sonia and Orvis, Robbie}, title = {{GRID FLEXIBILITY: METHODS FOR MODERNIZING THE POWER GRID}}, institution = {Energy Innovation}, year = {2016}, month = mar, url = {https://energyinnovation.org/wp-content/uploads/Grid-Flexibility-report.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }