Tutorial. Prof. Saifur Rahman. Tutorial. Prof. Saifur Rahman. Virginia Tech, USA. (c) Saifur Rahman. Tutorial B. Part 3: Demand Response Technologies

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1 Integration of Demand Response with Renewable Energy for Efficient Power System Operation Tutorial Prof. Saifur Part Rahman B Tutorial Prof. Saifur Rahman Virginia Tech, USA Tutorial Prof. Saifur Rahman Virginia Tech, USA IEEE PES IEEE ISGT PES ISGT Oct Dec 2011 Medellin, Columbia Jeddah, S. Arabia (c) Saifur Rahman Tutorial B Part 3: Demand Response Technologies Demand response and demand side management (DSM) Demand response technologies supply side and demand side Performance of demand response technologies Part 4: Demand Response Planning and OperaOons Sample demand response programs in operaoon Customer incenoves and parocipaoon Impact of demand response on the electrical load shape (c) Saifur Rahman 1

2 Basic Defini+ons Peak Load Reduc+on Ac+ons taken to modify the level and pa<ern electricity consump+on of consumers during peak hours or periods of very high demand: minimize the opera+on of expensive peaking units avoid transmission conges+on costs defer the building of new genera+on and transmission capaci+es. Demand Side Management (DSM) Ac+vi+es and incen+ve programs implemented and administered by u+li+es to modify energy consump+on and load shape of customers. These include: load control, load shiming, energy efficiency and conserva+on. Demand Response (DR) Demand Response can be seen as Demand Side Management but on the customer s terms, i.e., the customer decides on what loads to control and for how long, omen in response to a economic/price signals or special requests by u+lity. DSM Load Shape Objec+ves Source: Primer on Demand- Side Management, World Bank Document CRA No. D06090, 02/2005 2

3 Demand Response Demand Response is the set of ac+ons taken by consumers to reduce their consump+on of electricity and/or increase their own produc+on of electricity in response to economic signals or dispatch requests. Examples of Demand Response ac+ons include: reducing the duty- cycles of HVAC and water heaters, shedding load or shiming electricity usage to off- peak hours and, turning on the onsite back- up genera+on (diesel or renewables). Demand Response is considered capacity, i.e., equivalent to a generator that can be dispatched by the u+lity to keep the grid in balance and maintain its reliability. Energy Efficiency as Demand Response Energy Efficiency (EE) measures, such as one- off installa+on of efficient devices and appliances as well as adop+on of efficient processes and systems that provide long- term and con+nuous reduc+on in electricity demand can be considered as a form of Demand Response. EE measures require no ac+on by customer once installed. Examples include: replacing incandescent ligh+ng with compact fluorescent or solid- state ligh+ng, installing building automa+on, installing adjustable speed drives for electric motors used in HVAC and industrial processes. However, EE measures need to be updated to the best- available technologies every few years to qualify as Demand Response. 3

4 Some major benefits of DR are: q Saving in generaoon investment, deferring T&D upgrades q Energy efficiency q FacilitaOng renewable energy integraoon q Be]er equipment use (e.g. increase in load factor) q DR and Smart Grid: Smart Grid technologies (e.g. smart meter) facilitate DR Poten+al (FERC): Why demand response? Benefits & potential q ExisOng DR capability: Can reduce 4% of US peak demand (810,000 MW in 2009) q DR could shave about 32,000 MW off US peak load in 2010 q Based on current industry best pracoces: 9% US electricity demand can be saved q With improved DR: peak shaving could reach 14-20% of the peak Benefits of Demand Response Demand Response is far cheaper than dispatching the peaking unit, omen a natural gas fired gas turbine sta+on. Demand Response can be dispatched and realized within 5-10 minutes as compared to the minutes needed by a peaking unit turbine to ram up to full capacity. Demand Response helps reduce transmission conges+ons and electricity price vola+li+es thus enabling power exchanges in the wholesale market from regions with surplus to regions with shortage and ensuring the reliability of the system. Demand Response, unlike peaking thermal units, does not emit greenhouse gases and can be considered as clean energy. Demand Response is more reliable than the capacity obtained from a single peaking power sta+on, as it can be sourced from a large and distributed popula+on. 4

5 Types of Demand Response Demand Response can be broadly classified into two: Economic Response: Capacity available on a day- to- day basis created through price signals to the consumer. Response is voluntary. Reliability Response: Capacity on standby that can be called upon to maintain system reliability, also referred to as Con+ngency or Emergency Response. Response can be both voluntary and obligatory (direct load control, interrup+ble load etc.) Types of Demand Response FERC and NERC are in the process of standardizing and classifying Demand Response types as part of their ini+a+ve to create a single Demand Response Availability Data System (DADS) for use by all. These include: Time/Pricing Based Time- of- Use Pricing CriOcal Peak Pricing Real- Time Pricing Peak Time Rebate Economic/Incen+ve Based Direct Load Control InterrupOble Load CriOcal Peak Pricing with Control Load as Capacity Resource Spinning Reserves Non- Spinning Reserves Emergency Demand Response RegulaOon Service Demand Bidding and Buyback System Peak Response Transmission Tariff 5

6 Source: Demand Response Availability Data System (DADS) Technical Workshop, NERC, Feb Demand Response Enabling Technologies Same technologies enabling the Smart Grid Distribu+on Automa+on Automated Metering Infrastructure (AMI) Home/Building Energy Management Programmable Ligh+ng and Load Controllers Embedded Controls and Communica+ons Home Area Networks (HAN) Wide Area Networks (WAN) Informa+on Clearinghouse Websites 6

7 How is Demand Response Implemented? Demand Response Programs are omen outsourced by u+li+es to third- party organiza+ons called Aggregators or Curtailment Service Providers (CSP) who: enroll customers in DR programs, provide the technology and ini+al investment to customers manage the Demand Response programs for customers in return, take a share of the customer s revenue With the advent of the Smart Grid and its enabling technologies such as Automated Metering Reading (AMR) and Home Automa+on Networks, u+li+es are increasingly bypassing Aggregators and beginning to provide Demand Response services themselves directly. How is Demand Response implemented? DR Users Independent System Operators (ISO) Regional Transmission Orgs. (RTO) UOliOes DR Sellers ResidenOal Commercial Industrial DR Aggregators or Curtailment Service Providers Enroll DR parocipants Manage DR programs Revenue Sharing EnerNoc NuEnergen Ameresco Comverge etc. 7

8 How is Demand Response Marketed? Demand Response capaci+es are considered same as genera+on capaci+es and are therefore being traded the same way, i.e., on day- ahead markets operated by power exchanges, RTOs and ISOs. Aggregators can offer demand response capacity to the market. If cleared, customers will be paid the market clearing price. Demand Response capaci+es now fetch, by rule, the market price for electricity, known as the loca+onal marginal price (LMP), when it is established to be cost- effec+ve to use them to cover for genera+on shortage. (FERC Order 745, Docket No. RM ) Example Demand Response Programs in Opera+on (PJM) PJM System: Regional transmission organizaoon (RTO) serving 17 uolity zones. Gen. Capacity: 180,400 MW Demand Response: 9,052 MW ( ) 14,940 MW ( ) Type: Combined EE, economic and direct load control. Managed by: Third party Curtailment Service Providers (CSPs), 8

9 Example Demand Response Event Bal+more Gas and Electric, PJM About 2,300 MWs of Demand Response were invoked at LMP ranging $200- $500/MWh Source: 2011 Final Emergency Load Management (ILR/DR) and Economic Demand Response summary, PJM Example Demand Response Event managed by a Curtailment Service Provider 9

10 Demand Response Capaci+es of Major ISOs and RTOs Demand Response (MW) % Peak Demand Demand Response (MW) % Peak Demand California ISO (CAISO) 3, , Electric Reliability Council of Texas (ERCOT) 1, , ISO New England, Inc. (ISO- NE) 2, , Midwest Independent Transmission System Operator (MISO) New York Independent System Operator (NYISO) 5, , , , PJM InterconnecOon, LLC (PJM) 10, , Southwest Power Pool, Inc. (SPP) 1, , Source: Assessment of Demand Response and Advanced Metering, Staff Report, FERC, Nov

11 Poten+al Peak Load Reduc+on a<ained by Demand Response (by region and customer class, 2010) Source: Based on Survey undertaken for the 2010 Assessment of Demand Response and Advanced Metering report by the Federal Energy Regulatory Commission Poten+al Peak Load Reduc+on a<ained by Demand Response (by type of demand response and customer class, 2010) 11

12 Customer Incen+ves and Par+cipa+on UOliOes ogen provide incenoves enocing customers to join demand response programs. Some examples: U+lity Type Descrip+on PG&E Technical Assistance and Technology IncenOve (TA&TI) Up to $125/kW of demand response to assist customers with investment in demand response and energy management technologies; Up to 75% of the demand response project costs NYSERDA TA&TI Up to $100/kW Upstate and $200/kW Downstate to offset cost of equipment and technology; 75% of project cost SDGE TA&TI Up to $300/kW SCE TA&TI Up to $300/kW How can Demand Response Improve Acceptance of Renewables into the Electric Power Grid 12

13 PJM 13- Month Wind Generation Source: PJM wind power statistics, MW Peak Saving w/ DR MW Peak Saving 13

14 22500 MW Peak Saving w/ DR MW Peak Saving Wind Power Output MW How can the Smart Grid Help? Peak load reduction, generator efficiency improvements and DER integration are major benefits of the smart grid Load control at the customer level can provide significant peak load reductions How to incentivize the customer? 28 14

15 Smart Grid Definition According to United States Department of Energy s modern grid initiative, an intelligent or a smart grid integrates advanced sensing technologies, control methods and integrated communications into the current electricity grid. 29 Smart Grid AMI Capability+ Remote detec+on sensors everywhere AMI Central and distributed analysis Customer Voltage Measurement Correc+on of disturbances on the grid Op+mizes grid assets Distribu+on Automa+on Self Healing Enable use of renewable resources Price Signals sent to Customer AMR Customer Outage DetecOon Leverage data to understand system performance be<er AMR Capability+ Automated Meter Reads Remote TFTN Hourly Remote Meter Reads New Rate Design Theg ID Load Control Remote Meter Programming Enable electrifica+on of transporta+on 3 0 Source: EnerNex 15

16 Starting and End Points of a Smart Grid From Generator to Refrigerator Power Plant Transmission Distribution Home Business End-use Appliances Electric Power & Communication Infrastructures 1.Power Infrastructure Data network Users Central GeneraOng StaOon Step- Up Transformer 2. Information Infrastructure Control Center DistribuOon SubstaOon Gas Turbine Receiving StaOon DistribuOon SubstaOon Recip Engine Micro- turbine DistribuOon SubstaOon Photo voltaics Residential Data Concentrator Recip Engine Fuel cell Commercial CogeneraOon Ba]eries Flywheel ResidenOal Industrial Commercial Source: EPRI 32 16

17 PG&E Smart Grid Vision Today s Grid Future Grid Source: Andrew Tang, PG&E s Smart Grid Vision, April Online [Available]: %20CEC%20SmartGrid%20workshop% %20v1.pdf Building Blocks of the Smart Grid Saifur Rahman 17

18 Smart Grid Projects in the United States References used 1. h]p://siteresources.worldbank.org/intenergy/resources/primerondemand- SideManagement.pdf 2. h]p:// 3. h]p://en.wikipedia.org/wiki/demand_response 4. h]p://pjm.com/markets- and- operaoons/demand- response.aspx 5. h]p:// response- demand- side- management- what s- difference/ 6. h]p:// and- operaoons/demand- response/~/media/markets- ops/rpm/ dr- ee- in- rpm- collateral.ashx 7. h]p://pjm.com/markets- and- operaoons/demand- response/~/media/markets- ops/dsr/dr- sympoisum- ii- proceedings.ashx 8. h]p:// act/demand- response.asp 9. h]p://pjm.com/markets- and- operaoons/demand- response/~/media/markets- ops/dsr/2011- final- energy- load- management- and- economic- demand- response- summary.ashx 10. h]p:// response- demand- side- management- what s- difference/ 11. h]p://downloads.lightreading.com/internetevoluoon/thomas_weisel_demand_response.pdf 12. h]p:// 13. h]p:// 18

19 Thank you Prof. Saifur Rahman 19