Timescales on the grid
Power demand fluctations can be broken into timescales from micro-seconds to decades. On the "decades" end of the scale, the power industry and utility regulators work together to plan and fund construction of power plants and the associated transmission and distribution infrastructure. When you turn your air conditioner off today it doesn't affect these long term processes, but if you (and enough of your neighbors) do this consistently, then there will be a measurably decline in cyclic demand, which will be factored into the planning process.
But even on the micro-second time-scale, turning off an air conditioner (or even just a light) does result in less fuel being burned now. To explain how, we need to build up the timescales from micro-seconds to seconds (beyond that, NMech did a good job explaining the hourly to annual time scales).
0.000001 - Inertial response at microsecond timescales
Fundamentally, generators are large pieces of spinning iron. This applies to coal, nuclear, natural gas, hydro, and wind generators. All of this spinning iron has inertia -- a fact around which the system is designed (in the case of solar power, grid-connected PV inverters are actually designed to emulate the behavior of spinning iron).
Inertia is "the resistance of any physical object to any change in its velocity" (Wikipedia). If you touch a huge spinning wheel, it will slow down -- but this change in speed will be imperceptible, and not instantaneous, due to the wheel's inertia.
On the grid, touching the wheel is akin to increasing the load -- turning on a light, toaster, hair dryer, etc. The inertia present on the grid causes a time delay between the change in load, and the change in speed.
This time delay is where the first level of grid control comes in: droop control.
0.001 - Droop control at millisecond timescales
Droop control is a proportional control on the "throttle" of each generator. Each generator on the grid is programmed to increase its speed by x% for every y% reduction in the frequency detected on the grid (and decrease speed when the frequency increases -- the proportion x:y is the same in both directions). This x:y proportion is the droop percent. The frequency, in turn, is directly proportional to the speed of each generator.
Droop control is like a string connecting the needle on a speedometer to the "gas pedal" of the generator -- as the speed decreases, the string pulls the pedal to give it more gas -- once the speed increases, the tension is released and less gas is supplied. This seems a bit backwards, because normally we think of using the throttle to control the speed of a car, but in this case we're talking about dozens or more cars all welded bumper-to-bumper, so one throttle can't actually do much. But if each car has the same exact speedometer/string/throttle set-up, we start to see how this could affect the speed control of the whole system.
This system has two shortcomings, though:
- What about when the load increases or decreases outside the range of droop control (i.e. all the generators are at full throttle and load is still increasing)?
- How is a constant frequency maintained?
This is where automatic generator control comes in.
1.0 - Automatic generator control at second timescales
The "throttle" functions differently for each type of generator. For natural gas, it's similar to a car -- you adjust the amount of fuel burned and the power output is directly adjusted. For coal and nuclear systems, it's more complicated, because the fuel is used to produce steam, and the steam then runs the generator. Droop control directly controls the "steam valve."
Automatic generator control (AGC) incorporates the diversity of generator types into a single algorithm which can be applied across the grid. Variables in AGC include:
- Droop percent, as discussed above
- Frequency setpoint, fixed at the grid level (60 Hz or 50 Hz, depending on the continent)
- Area control error (ACE), a power output adjustment amount which depends on how much power the node where the generator is connected needs to import or export to other nodes
Where droop control is simple and straightforward to implement (at it's most basic, it can be done using passive electrical components), AGC requires more complicated, usually digital controls.
10 - Minute timescales and beyond
After AGC things get more complicated and less standardized across the industry. At the minute timescale and beyond, variables such as fuel prices, weather forecasts, emissions rates, and load forecasts can be included in control algorithms. Design of these algorithms vary by region and utility. The Wikipedia article on regional transmission organizations is a good starting point.
tl;dr - how does this save fuel when I switch off a light?
When you switch off a light, grid inertia immediately kicks in to increase the frequency (speed up). This triggers the droop control algorithm across the grid to throttle down generators. The generators which can physically respond fastest are programmed to do so -- these generators also tend to be those directly burning fossil fuels -- usually natural gas, but sometimes diesel.
Even in the case of coal, however, there will be decreased fuel use, but not until AGC kicks in. Droop control throttles down the steam valve directly, but as the pressure in the steam vessel responds to this change, less coal will need to be burned to maintain the set pressure.