Demand Response Demand Response Presentation to Reducing Energy - - PowerPoint PPT Presentation

Demand Response Demand Response

Presentation to Reducing Energy Use Workgroup September 8, 2008

Delaware Division of the Public Delaware Division of the Public Advocate Advocate

Sarah Buttner Energy Transition Consulting

This Presentation This Presentation

What is demand response What is demand response Need for and benefits of demand response Need for and benefits of demand response How is demand response achieved How is demand response achieved What What’ ’s state of play s state of play Tool for this group? Tool for this group?

Demand Response Demand Response

Tool to shave electric peaks Tool to shave electric peaks Give customers Give customers

• Incentives to reduce use at peak

Incentives to reduce use at peak

• Tools to control cost

Tools to control cost

Different from energy efficiency Different from energy efficiency

• Some cross benefits

Some cross benefits

DPA supports demand response DPA supports demand response

Why Do We Need Demand Why Do We Need Demand Response? Response?

Demand growing Demand growing— —19% over next decade 19% over next decade Capacity projected to grow just 6% Capacity projected to grow just 6% Customer electricity bills rising Customer electricity bills rising

• Give customers ability to control usage

Give customers ability to control usage

Consensus forming Consensus forming

• Deploy an integrated approach

Deploy an integrated approach

Supply side Supply side Demand side Demand side

The Brattle Group, Discussion Paper May 16, 2007

Concentration of Demand Concentration of Demand

Demand highly concentrated in top 1% of Demand highly concentrated in top 1% of hours hours PJM: these 80 PJM: these 80 – – 100 hours account for 100 hours account for 16% of peak demand 16% of peak demand

The Brattle Group, Discussion Paper May 16, 2007

8

Load Duration Curve: 2007-2008

CA ISO Load D uration C urve M ay 28, 2007 to M ay 27, 2008

15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 208 416 624 832 1040 1248 1456 1664 1872 2080 2288 2496 2704 2912 3120 3328 3536 3744 3952 4160 4368 4576 4784 4992 5200 5408 5616 5824 6032 6240 6448 6656 6864 7072 7280 7488 7696 7904 8112 8320 8528 8736

H

• urs

System D e m and; (M W )

48,491 M W Peak 5% of Peak or 46,066 M W D em and >46,066 M W O nly 15 Hours/Y r 10% of Peak or 43,461 M W Dem and > 43,461 M W O nly 55 Hours/Y r

Presentation by John Goodin U.S. Demand Response Coordinating Committee, Town Hall Meeting May 12,13, 2008

High Demand Just Few Hours/Year

Peak Demand Rising Peak Demand Rising

North American Supply & Demand

800000 850000 900000 950000 1000000 1050000 1100000 1150000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 MW Commited Supply Projected Total Internal Demand

10% Rise 20% Rise

Rick Sergel, President & CEO, NERC Rick Sergel, President & CEO, NERC Demand Response Town Meeting, June 2, 2008 Demand Response Town Meeting, June 2, 2008

20% More Resources Needed 20% More Resources Needed

Generation Generation Transmission Transmission Distribution Distribution Demand Response Demand Response Efficiency Efficiency Resource Resource Management Management

Rick Sergel, President & CEO, NERC Rick Sergel, President & CEO, NERC Demand Response Town Meeting, June 2, 2008 Demand Response Town Meeting, June 2, 2008

Why Use Demand Response? Why Use Demand Response?

Fewer new plants that would be used less than Fewer new plants that would be used less than 100 hours/year 100 hours/year

• These peaking plants less efficient

These peaking plants less efficient

Provide accurate price signals to customers Provide accurate price signals to customers

• Convey true cost of power

Convey true cost of power

Electricity at peak very expensive Electricity at peak very expensive

• Customers decide whether to continue to buy at high

Customers decide whether to continue to buy at high price price

Save substantial money for society, too Save substantial money for society, too

The Brattle Group, Discussion Paper May 16, 2007

Brattle Group Study Brattle Group Study

5% reduction in peak demand 5% reduction in peak demand Eliminate need for installing 625 peaking Eliminate need for installing 625 peaking plants plants Savings of $3 billion a year Savings of $3 billion a year

• $35 billion over 20 years

$35 billion over 20 years

In addition, downward pressure on prices In addition, downward pressure on prices

• Temporary benefit

Temporary benefit

• Significant: $5 billion to $10 billion nationally

Significant: $5 billion to $10 billion nationally

The Brattle Group, Discussion Paper May 16, 2007

Operational Benefits for Utilities Operational Benefits for Utilities

• Automatic outage detection

Automatic outage detection

• Avoided meter reading costs

Avoided meter reading costs

• Easier service connect/disconnect

Easier service connect/disconnect These benefits can help pay for infrastructure These benefits can help pay for infrastructure

August 6 August 6th

th

2 3 4 5 6 7 03:00 06:00 09:00 12:00 15:00 18:00 21:00 00:00 kW Monday, August 06, 2007 1:00:00 PM to 6:00:00 PM

Curtailment Performance Graph APCO, CPP, Test Group, mean, kW

Baseline Actual Energy Savings

Curtailment Date Monday, August 06, 2007 Start Time 1:00:00 PM End Time 6:00:00 PM Event Length 5:00 Trueup Adjustment 125.35% Error Adjustment 0.00% Minimum Reduction 2.40kW Maximum Reduction 3.07kW Average Reduction 2.80kW

Alabama Power Presentation, John Kelley U.S. Demand response Coordinating Committee, June 2 – 3, 2008

How Demand Response Is How Demand Response Is Achieved Achieved

Automated Metering Infrastructure Automated Metering Infrastructure Smart thermostats Smart thermostats Smart appliances Smart appliances Direct load control Direct load control Dynamic pricing Dynamic pricing

• Time of Use rates

Time of Use rates

• Real time

Real time

• Critical peak

Critical peak

FERC Definition FERC Definition

Definition of Advanced Metering: Definition of Advanced Metering: Advanced metering is a metering system Advanced metering is a metering system that records customer consumption [and that records customer consumption [and possibly other parameters] hourly or more possibly other parameters] hourly or more frequently and that provides for daily or frequently and that provides for daily or more frequent transmittal of more frequent transmittal of measurements over a communication measurements over a communication network to a central collection point. network to a central collection point.

http://www.ferc.gov/industries/electric/indus-act/demand- response/dem-res-adv-metering.asp

Connected Home

Smart appliances Smart thermostats Energy information

Choice Choice Empowering Customer Empowering Customer

CPP

PTR

Rates and Rebates

TOU Rates

Larry Oliva, Director, Tariff Programs and Services, June 3, 2008

myPower Time myPower Time-

• of
• f-
• Use

Use – – Critical Peak Pricing Critical Peak Pricing (TOU (TOU-

• CPP)

CPP) Summer 2007 Pricing Plan Summer 2007 Pricing Plan

Weekdays

June - September 4 8 12 16 20 24 28 9 AM 1 PM Time of Day

Price in cents per kWh

9 AM

8.7¢

Medium Price (Base Price)

23.7 ¢

High Price (On- Peak)

8.7¢

Medium Price (Base Price)

3.7¢

Low Price (Night Discount) 6P M 10 PM

$1.46

Critical Price Standard Residential Rate

Weekends

June - September 4 8 12 16 20 24 28 9 AM Time of Day

Price in cents per kWh

9 AM

8.7¢

Medium Price (Base Price)

3.7¢ Low Price

(Night Discount) 10 PM Standard Residential Rate

Presentation at National Town Meeting on Demand Response, Washington, DC, June 3, 2008 Fred Lynk, Manager – Market Strategy and Planning

What What’ ’s state of play s state of play

Pilots, FERC Pilots, FERC-

• NARUC Collaborative,

NARUC Collaborative, Energy Act of 2005 Energy Act of 2005 PJM programs PJM programs U.S. Demand Response Coordinating U.S. Demand Response Coordinating Committee, MADRI, MWDRI, Committee, MADRI, MWDRI, Delmarva Blueprint for the Future Delmarva Blueprint for the Future

Demand Response a Tool for This Demand Response a Tool for This Group? Group?

Relationship to reducing energy use Relationship to reducing energy use Benefit to consumers Benefit to consumers

• Way to control costs

Way to control costs

Reduces overall costs of electric system Reduces overall costs of electric system

Fewer peaking plants needed Fewer peaking plants needed Downward pressure on price at peak Downward pressure on price at peak

Improved electric service and utility Improved electric service and utility expenses reduced expenses reduced

Questions?