Demand Response and Energy Efficiency in the Midwest ISO _____ A Primer John Moore Bruce Campbell Kevin Murray September 28, 2010 1
Agenda • Types of Midwest ISO Demand Response (DR). • Products DR is eligible to supply. – Energy, ancillary services, capacity, emergency DR. • Current levels of DR participation. • Aggregators of retail customers (ARCs). • How MISO uses DR/EE in transmission planning. 2 Protecting the Midwest’s Environment and Natural Heritage
RTO Boundaries 3 Protecting the Midwest’s Environment and Natural Heritage
TYPES OF DEMAND RESPONSE 4 Protecting the Midwest’s Environment and Natural Heritage
Two General Categories of DR • MISO has two general categories of demand response. – DRR Type I and DR Type II resources directly participate in MISO markets. • Type I and Type II resources are dispatched by MISO. – Load modifying resources (LMRS) are identified to MISO for planning purposes but are DR managed by electric distribution utilities (EDUs). • LMRs normally dispatched by EDUs. • MISO may call on LMRs during emergencies. 5 Protecting the Midwest’s Environment and Natural Heritage
DRR Type I • A “block” type DR resource – Generally capable of a single specified reduction – Modeled similar to a generator – Can offer as energy, reserves, can be a capacity resource – Must be directly capable of receiving dispatch instructions from MISO 6 Protecting the Midwest’s Environment and Natural Heritage
MISO Definition of DRR Type I A resource hosted by an energy consumer, load serving entity or aggregator of retail customers (ARC) within the MISO balancing authority area and that (i) is registered to participate in the energy and operating reserve markets, (ii) that is capable of supplying a specific quantity of energy, contingency reserve or capacity, at the choice of the market participant, to the energy and operating reserve market through physical load interruption, (iii) is capable of complying with the transmission provider’s instructions and (iv) has the appropriate metering equipment installed. – In addition to metering, the Type I resource must be capable of receiving dispatch instructions from MISO through an XML listener. 7 Protecting the Midwest’s Environment and Natural Heritage
DRR Type II • A “variable” type DR resource – Generally capable of a range of specified reduction – Modeled similar to a generator – Can offer as energy, reserves, can be a capacity resource – Must be directly capable of receiving dispatch instructions from MISO and meeting setpoint instructions 8 Protecting the Midwest’s Environment and Natural Heritage
MISO Definition of DRR Type II A resource hosted by an energy consumer, load serving entity or ARC within the MISO balancing authority area and that (i) is registered to participate in the energy and operating reserve markets, (ii) is capable of supplying a range of energy and/or operating reserve, at the choice of the market participant, to the energy and operating reserve market through behind the meter generation and/or controllable load, (iii) is capable of complying with transmission provider’s setpoint instructions and (iv) has the appropriate metering equipment installed. – In addition to metering, the Type II resource must be capable of receiving dispatch instructions from MISO through an XML listener. 9 Protecting the Midwest’s Environment and Natural Heritage
Load Modifying Resources • LMR – A Demand Response or Behind the Meter Generation resource. – Demand Response - Interruptible load or direct control load management and other resources that can reduce demand during emergencies. – Behind the Meter Generation resource - Generation resources used to serve wholesale or retail load located behind a CPNode (commercial pricing node) that are not included in the transmission provider’s setpoint instructions. 10 Protecting the Midwest’s Environment and Natural Heritage
TYPES OF DR PRODUCTS 11 Protecting the Midwest’s Environment and Natural Heritage
Energy and Capacity • Energy – Reduction in short term energy use in Real Time or Day Ahead markets. Results in lower short term prices for all users • Emergency Energy (Capacity) - Also called reliability or planning reserves. Reduces demand when demand threatens to exceed supply. Used to avoid rolling blackouts. 12 Protecting the Midwest’s Environment and Natural Heritage
Ancillary Services • Procured by the grid operator to help control and stabilize the grid. – Regulation – Ability decrease or increase Demand (or supply) within seconds. Full range capability within 20 minutes. – Spinning Reserves – Ability to decrease demand (or increase supply) within 10 minutes and hold for a specified period. 13 Protecting the Midwest’s Environment and Natural Heritage
Products & Resources - Summary Regulating Spin/ Supp. Emergency Product Energy Reserve Reserve Module E Energy DR - Type I X X X X DR Type II X X X X X LMR DR X X LMR BTMG X X EDR X 14 Protecting the Midwest’s Environment and Natural Heritage
MISO’s DR Philosophy • MISO’s philosophy is that it will, unlike other RTOs, not create “programs” for demand response. Instead MISO will seek to create opportunities to integrate demand response into existing MISO markets. 15 Protecting the Midwest’s Environment and Natural Heritage
Implications of MISO’s Approach • MISO’s philosophy adheres closely to a generation model that can result in underuse of DR due to failure to integrate the differing characteristics of DR. • Compare : PJM allows “voluntary” response to energy prices without penalty, allowing for the inherent uncertainty in the quantity of reduction 16 Protecting the Midwest’s Environment and Natural Heritage
MISO DR PARTICIPATION 17 Protecting the Midwest’s Environment and Natural Heritage
Summary • To date MISO has experienced minimal levels of direct DR participation in MISO markets, relative to other RTOs. – As of May 2010,13 DRR Type I resources had registered with MISO representing 209.5 MW. • One additional registration was pending representing 1.667 MW. – As of May 2010 there was one DRR Type II resource registered with MISO representing 60 MW. 18 Protecting the Midwest’s Environment and Natural Heritage
LMR Participation • Legacy DR options available through EDU remain the prevalent type of DR in the MISO region. – MISO 2010 forecast of 1,811 MW of direct load control. – MISO 2010 forecast of 2,814 MW of interruptible loads. – MISO 2010 forecast of 3,385 MW of behind the meter generation. (Source MTEP09) 19 Protecting the Midwest’s Environment and Natural Heritage
Legacy Programs • Legacy utility programs tend to be inflexible “command and control” type tariff riders • Many potential DR participants are unwilling to yield such control or their processes to utilities, indicating that there is an untapped resource available 20 Protecting the Midwest’s Environment and Natural Heritage
Summary MISO Demand Response Participation Type I Type II 2% 1% DLC 22% BTMG 41% IL 34% 21 Protecting the Midwest’s Environment and Natural Heritage
AGGREGATORS OF RETAIL CUSTOMERS 22 Protecting the Midwest’s Environment and Natural Heritage
Background • Through Order 719, FERC directed operators of organized markets such as MISO to address barriers to demand response and address jurisdictional issues at the retail/wholesale interface. • While some large retail customers can participate directly in markets, ARCs can facilitate participation of smaller customers. 23 Protecting the Midwest’s Environment and Natural Heritage
Role of ARCs • The sole business of many ARCs is to enable DR activity. – Manage RTO interfaces • Commitments • Settlements – Provide metering • Utilities are often conflicted by the impact of revenue reductions from foregone sales • ARCs are not conflicted 24 Protecting the Midwest’s Environment and Natural Heritage
ARCs in MISO • Responding to Order 719, MISO has proposed rule changes to FERC that are intended to remove barriers to ARC participation. • The changes include: – Elimination of requirement to be an LSE – Reformed (but perhaps still excessive) market credit requirements – Modifications to technical requirements 25 Protecting the Midwest’s Environment and Natural Heritage
Jurisdictional Issues • Some utilities and Retail regulators (states, munis, coops) have asserted that RTO based DR programs may conflict with local regulated DR programs. • RTOs may not unduly discriminate among market participants • FERC has provided guidelines for RTOs that are intended to provide clarity • Many utilities, including public power, view RTO DR as a threat to customer control 26 Protecting the Midwest’s Environment and Natural Heritage
Recommend
More recommend
