Demand Response 2.0: transitioning from load shedding to load shaping Ross Malme Demand Response Resource Center April 19, 2011
From plant to plug, helping customers make the most of 5 end markets Energy and infrastructure Industry Data centres & networks Buildings Residential their energy 72% part of the worldwide energy consumption of these five markets Offering integrated solutions for segments like Electric utilities Water & waste water Oil & Gas Marine Mining, Mineral, Metals Machine builders Data centres/it Hospitals Hotels Office buildings Retail Residential
Bombardier CRJ-700 Only Seats 70 People 80 People Show Up for the Flight Airline Pays (e.g. ticket vouchers) 10 people to take a later flight
Power Grid only has 70 MW Power Grid needs 80 MW Power Grid pays consumers to reduce 10 MW to balance supply & demand
What is demand response? US DOE Demand Response Definition: Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized. Encompasses traditional programs and ISO programs US Federal Position: It is the policy of the United States that time-based pricing and other forms of demand response.shall be encouraged, the deployment of such technology and devices.shall be facilitated, and unnecessary barriers to demand response participation in energy, capacity and ancillary service markets shall be eliminated. US Energy Policy Act of 2005, Sec. 1252(f)
Schneider Smart Grid Focus Area Distributed Generation 2 Centralised Generation 5 Renewable On-site Storage Backup Power Market Operator (ISO) Residential Commercial Industrial Transportation Transmission Distribution Consumers Renewable Energy Generation 1 Demand Mgmt Solutions Electric Distribution Companies 4 Targets Intelligent Metering & Demand Response C&I Customer Clusters
Shifting Market Dynamics Require New Solutions 1.) Energy consumption is expected to increase as much as 50% by the year 2030 - (Energy Information Administration) 2.) Generation and transmission projects will not be built fast enough to meet demand (EPRI) 3.) AMI installations will lead to real time pricing for customers as a way to pass through higher costs (FERC) 4.) Renewable generation mandates will add 20-40% to the cost of generation (AWEA) Pre 1990s 1990s - Wholesale power markets deregulate, trading starts - Independent power generators outpace utility built units - First interval data meters 2000s - Retail deregulation spreads - Utilities separate business units into Distribution, Generation and Transmission - ISOs take on roll of market pricing and clearing for generation - Renewable generation market starts in earnest 2007+ - Utilities outsource simple demand reduction needs to aggregators - DOE stimulus pushes AMI installations -28 states adopt renewable generation mandates for utilities -ISO and early adopter utilities push customers to complex demand programs (day ahead, real time) -CA mandates real time pricing for all C&I customers -Federal carbon program limiting emissions pending -Many new market participants enter the smart grid arena - Local utility interruptible rates for large industrials - DSM programs begin
Virtual Power Plant = Demand Response + Energy Efficiency + Smart Grid Traditional Supply Resources CT Combined Cycle Coal, Nuclear C&I Curtailment Programmable Thermostats A/C Tune-ups The Virtual Power Plant Efficient Lighting C&I Custom Rebates Refrigerator Recycling Energy Efficient Transformers Source: PLMA/KCP&L 10/28/08
ISO DR Experience
Major US Markets Source: Federal Energy Regulatory Commission website updated September 26, 2006
DR Economic Snapshot MARKET TOTAL DR DR VALUE / MW-YR PAYMENTS* ISO-NE $134,000,000 $15,500 - $54,000 NYISO $127,440,000 $27,480 $79,920 PJM $173,343,000 $16,000 $80,000 ERCOT $200,000,000 $90,000 - $180,000 CAISO $150,000,000 $84,000 MISO Not Available Not Available TOTAL $788,000,000 * Estimated DR value is dependent on the asset s location and speed of response.
Types of Demand Management Capacity Only Day Ahead Dynamic Pricing - Easy to Implement - Low Barriers to Entry - Primary CSP Offering - Measure and Monitoring - Daily Price Settlement - Utility & LSE Market - Smart Grid Direction - High Barriers to Entry - Real Time Market Requirements Capacity Day Ahead Dynamic Pricing Metering Type Basic Utility Settlement Grade Revenue Grade Settlement/Data Intervals Monthly Daily 15 minute Real Time 5 minute Notification Email, Phone Signal from EDC/ISO Real Time Software None required Basic Advanced (BAS) Upgrade None required Maybe Required NOC None required Basic (Optional) Required Consulting Services Optional Yes Required Outsourced Services Optional Yes Required
Smart Grid Demand Response Evolution Dynamic Pricing Value to Utility & End Customers Low High Day Ahead Day ahead signal from utility allows building to shift loads to non-peak hours Building infrastructure allows it to react in 5 mins to utility signals Through trading partners, allows arbitrage of real time pricing markets Capacity Only Predominant form of DR in place today Building agrees to shed load at peak times in exchange for payment Called only on peak usage days (<10 X p.a.) Low Investment Required for Implementation High
PJM Demand Side Response Estimated Revenue *Capacity revenue prior RPM implementation on 6/1/07 estimated based on average daily ALM capacity credits and weighted average daily PJM capacity market clearing price.
Installed Wind Capacity in ERCOT 10,000 9,000 Cumulative Planned (Signed Interconnection Agreement) Cumulative MW Installed 8,066 8,661 9,021 Wind Capacity Installed by Year (MW) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 816 977 1,173 1,385 1,854 2,875 4,785 6,023 2,043 6,023 2,638 6,023 2,998 116 116 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year (as of September 30,2008)
High wind ramp rates (April 13, 2008) Wind generation increased from around 750 MW at 3:40 to 2250 MW at 4:10 Ramp rate of 50 MW/Min for 30 minutes
Wind Event: Feb. 26, 2008 (3pm to 9 pm) Wind output was significantly below updated (hour-ahead) wind resource plans
ERCOT Wind Event: 2/26/08 (3 to 9 p.m.) Load increased by 400 MW between 5:30 and 6:30 pm (evening peak) Source: PLMA/ERCOT 10/28/08
ERCOT Wind Event: 2/26/08 (3 to 9 p.m.) It appears to be the deployment of LaaRs which halted frequency decline and restored ERCOT to stable operation. -- ERCOT EECP Event Report Source: PLMA/ERCOT 10/28/08
1800 NSRS for September Actual vs. Proposed* Non-Spin Procurement: Sept. 15, 2008 NSRS Procurem ent (M W ) 1600 1400 1200 1000 800 600 400 200 0 1 3 5 7 9 11 13 15 17 19 21 23 Hour Ending Actual Proposed * Proposal was approved by ERCOT Board on Oct. 21, 2008
Impact of 18 GW of Wind on Base-load Generation 90,000 80,000 70,000 Load and Net Load Duration Curves Hourly Load (MW) 60,000 50,000 40,000 30,000 20,000 10,000 0 Publicly Announced Coal Projects: 3,800 MW Publicly Announced Nuclear Projects: 9,200 MW Existing Coal Generation: 15,700 MW Existing Nuclear Generation: 4,900 MW 1 1,001 2,001 3,001 4,001 5,001 6,001 7,001 8,001 4,816 Hours Sorted Hour 6,111 Hours 8,167 Hours 2017 Load Duration Curve 2017 Net Load Duration Curve (18,456 MW Wind)
ISO Scheduling U T I L I T Y C U S T O M E R S Optimization Meter Data Mgmt. Forecasting Price Signal Mgmt. DM NOC Settlement BAS Middleware Scheduling Customer Mgmt. Load Profile Market Interface Settlement Data Management Portfolio Management Load Profile Price/Risk Settlement Demand Management Services POWER MARKETER Distribution Mgmt. Scheduling Load Profile.
DR Market Operation Reliability Market Operator Economic Zone 1 Zone 2 Zone 3 Zone 4 CSP Utility LSE Customer 1 Customer 2 Customer 3 Customer 4 Meter 1 Meter 2 Meter 3 Meter 4
DR Market Operation Reliability Market Operator Economic Zone 1 Zone 2 Zone 3 Zone 4 CSP Utility LSE Customer 1 Customer 2 Customer 3 Customer 4 Meter 1 Meter 2 Meter 3 Meter 4
Example: Integrated solutions in a building Simple software integration Interoperability and openness to third party systems Renewable energies HVAC control Lighting control Energy monitoring & control Motor control Access control Security Green: Make the connection of renewable energy sources easy, reliable and cost-effective Efficient & productive: Measure and control energy, automate, provide relevant diagnosis Manage processes Make all the utilities of any Infrastructure more efficient Critical Power & cooling Reliable: Prevent from power outage & quality variance Electrical distribution Safe: Transform and distribute power safely
Rockefeller Group Project Building Facts: Location: Mid Manhattan Peak Load: 14.5+ MW Size: 49 stories plus 4 sub floors Project Goals: Double existing demand response capacity Automate building response to DR events Use DR techniques to prepare for RTP contracts Lower carbon emissions LEEDS Gold + Certification Integrate multiple systems to single control platform
Drivers for Smart Building Projects Optimize building operation performance for electricity markets Change paradigm for Building Owner Use performance contracting as a financial tool Multiple revenue streams from wholesale and retail DR, energy efficiency, environmental attributes and supply side optimization Partnership between government, wholesale market operator, electricity supplier, local utility, building owner and building automation industry
California will be the test case Conversion of all C&I customers to time of use (TOU) rates begins in 2010 Retail deregulation will be re-instituted in June 2010 California is obviously the biggest market in the US with the highest energy costs in the continental US : however, The EDU s are still having trouble driving adoption of these programs San Francisco They need help State of California has allocated $500M to utilities for payment to customers/vendors to drive participation in efficiency & demand response projects PG&E $32.7B Power Market 1.7M C&I Customers Los Angeles SCE SDG&E
Thank You! Ross Malme Business Director Demand Response Resource Center Schneider Electric 3203 Medlock Bridge Road Norcross, GA 30071 Ross.Malme@US.Schneider-Electric.com 770-390-8500 ext 4