Demand Management from an Aggregator's Perspective David Brewster, - - PowerPoint PPT Presentation

Demand Management from an Aggregator's Perspective

David Brewster, President

May 21, 2009

Today’s Energy Challenges

Unprecedented Challenges

Higher Demand Increased Costs Renewable Energy

10% of Costs for 1% of the Time

Annual Energy Demand

50% 100%

Winter Spring Summer Fall

75% 90% 25%

Demand Response is the Solution

Reliable Clean Cost Effective Dispatchable

Demand Response

100 MW Demand Response 100 MW Combustion Turbine Transmission Losses None 8-10% Annual Carbon Emissions None 6,500 tons Siting Anywhere Limited Time to Build 3-6 months Years

Why Demand Response?

Aggregator Model

Connecting a Broken System

Management Network

Grid Operators Utilities Commercial Institutional Industrial

Aggregator Model

• Originated in U.S. restructured markets (ISO-NE, PJM, NYISO)
• Grid Operator/Utility contracts with aggregator for capacity
• Contract is similar to a power purchase agreement (PPA)
• Capacity payments ($/kW) and energy payments ($/kWh)
• Penalties apply for under-performance
• Aggregator builds a portfolio to deliver contracted capacity
• Responsible for all aspects of program delivery
• All costs (e.g., marketing, enablement) included in capacity/energy payments
• Contract is signed between Aggregator and end user (no tariff/rate required)
• Revenue is shared between aggregator and end user

Revenue Share Arrangement

GRID OPERATOR/ UTILITY DEMAND RESPONSE AGGREGATOR

Why Aggregation?

• More reliable resource performance
• Smaller customers can participate
• Idiosyncratic / variable loads can be matched

with others in the portfolio

• Risk-free participation

50 MW

5 MW 1 MW 1 MW 1 MW 1 MW 1 MW 1 MW 300 kW 250 kW 300 kW 400 kW 200 kW 1 MW

75 kW 75 kW 75 kW 75 kW 75 kW 75 kW 75 kW 75 kW 75 kW 75 kW 75 kW

300 kW 300 kW 300 kW 300 kW

75 kW 75 kW 75 kW 75 kW 75 kW

1 MW 300 kW 300 kW

75 kW 75 kW 75 kW 75 kW

vs.

Managing Risk: DR Portfolio Management

0% 50% 100% 150%

0% 50% 100% 150%

Customer 1 Customer 2 Customer 3 Customer 4 0% 50% 100% 150%

100% RISK 0% RISK

Customer 8 Customer 9 Customer 10 Customer 11 Customer 12 Customer 13 Customer 14 Customer 5 Customer 6 Customer 7 Customer 15 Customer 16

Grid Operator/Utility Aggregator By aggregating resources into a single portfolio, the aggregator manages 100% of the risk associated with delivering a contracted amount of capacity. In this manner, both the grid operator/utility and end users are protected from under-performance.

0% RISK 13

Avg Events 2006 103 % 34 2007 106 % 120 2008 102 % 101

• Cost-effective alternative to building/maintaining a combustion turbine
• Resource/fuel diversity
• No NIMBY or BANANA
• Reduced carbon exposure
• Flexible (sizing, contract length)
• Customer satisfaction
• Fully outsourced

Value Proposition to Grid Operator/Utility

Tampa Electric Company 35 MW EnerNOC DR Customer

Alignment of Incentives

• Under a $ per kW arrangement, incentives align with the utility’s interests

(more so than under a $ per site approach)

• It is in the Aggregator’s financial interest to:
• Minimize customer churn
• Maximize demand response capacity at a site
• Maintain a dynamic, reliable resource

Aggregators’ Skill Set

• Demand response aggregators have a very different set of core

competencies than grid operators and/or utilities – providing outsourced demand response and energy efficiency solutions is our only business!

• Aggregators already have made investments in:
• Infrastructure (software, NOC)
• Sales and Marketing (inside and outside sales)
• Curtailment expertise (certified energy managers, vertical-specific

knowledge)

• R&D (next-generation technologies, e.g. PowerTalk)

Investments in Technology Platform

18

Event Management Tools

(2) Customers and Utilities can view facility-specific, real-time energy reduction efforts through web-based PowerTrak software (1) EnerNOC tracks customer notifications, monitors event performance, and records all customers interactions through the Action Call Center (4) Within 48 hours, Utilities receive detailed Post-Event Performance Report (3) Utilities can monitor real-time, aggregate portfolio performance using EnerNOC’s Demand Response Dashboard

18

High-Growth, Scalable Network

1000 2000 3000 4000 5000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 5/6

Customer Sites

500 1000 1500 2000 2500 3000

MW Under Management MW Under Management Sites Under Management

As of May 2009, more than 3,000 MW Under Management 2,000 Demand Response Customers 5,000 C&I Sites Under Management 2008 2007 2006 2005 2009

The End User

C&I Customers of all types

Diversity of Customer Types

Value Proposition to End Users

• New revenue stream
• Reduced energy costs
• No cost or risk
• PR benefits

“Financially, DR makes a lot of

• sense. As energy costs go up, we

need to maintain control and reduce our reliance on increasing amounts of electricity.”

• Jake Nixon, Mission Produce, Oxnard, CA

Perhaps most important…

Site Enablement

Demand Response actions

Curtailment Self-Generation

Demand Response actions

Automatic Manual

Next-Generation Services

29 29 Customer Energy Scorecard & Recommendations

Your Facilities Your Recommendations

Monitoring-Based Commissioning (MBCx)

Technology-based Commissioning process to solve key problems

• Deployment: Remote capture of BMS and Meter data (no boots or additional

sensors)

• Persistent: Algorithms run every night
• Deliverables: monthly scorecards to integrate EE into workflow processes

$ savings, energy savings, and GHG reductions for each recommendation

• Cost: Priced on a shared-savings models with good ROI (for large buildings)

Impact of Monitoring-Based Commissioning on Building Consumption:

MBCx is like Retro-Commissioning Every Night

90% 95% 100% 105% 110% 115% 120% 125% Time Normalized Energy Usage

Monitoring-Based Comissioning (MBCx) Traditional, periodic recomissioning Recomissioning

(without MBCx)

Lost Opportunity

Presence Enabled Smart Grid

David Brewster 617.692.2002 dbrewster@enernoc.com