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’ ’s state of play s state of play What 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— —19% over next decade 19% over next decade Demand growing 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 – – 100 hours account for 100 hours account for PJM: these 80 16% of peak demand 16% of peak demand The Brattle Group, Discussion Paper May 16, 2007
High Demand Just Few Hours/Year Load Duration Curve: 2007-2008 CA ISO Load D uration C urve M ay 28, 2007 to M ay 27, 2008 50,000 48,491 M W Peak 45,000 5% of Peak or 46,066 M W 40,000 and > 46,066 M D em W O nly 15 Hours/Y r ) W 35,000 and; (M m 30,000 e D System 25,000 10% of Peak or 43,461 M W Dem and > 43,461 M W O nly 55 Hours/Y r 20,000 15,000 208 416 624 832 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 ours 8 Presentation by John Goodin U.S. Demand Response Coordinating Committee, Town Hall Meeting May 12,13, 2008
Peak Demand Rising Peak Demand Rising North American Supply & Demand 1150000 10% Rise 1100000 1050000 1000000 MW 20% Rise 950000 900000 850000 800000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Commited Supply Projected Total Internal Demand 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
th August 6 th August 6 Curtailment Performance Graph APCO, CPP, Test Group, mean, kW kW 7 Curtailment Date Monday, August 06, 2007 Start Time 1:00:00 PM End Time 6:00:00 PM 6 Event Length 5:00 Trueup Adjustment 125.35% Error Adjustment 0.00% Minimum Reduction 2.40kW Maximum Reduction 3.07kW Average Reduction 2.80kW 5 Baseline Actual Energy Savings 4 3 2 03:00 06:00 09:00 12:00 15:00 18:00 21:00 00:00 Monday, August 06, 2007 1:00:00 PM to 6:00:00 PM 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
Empowering Customer Empowering Customer Rates Choice CPP Choice Residential Residential PTR and Single Family Single Family Multi Family Multi Family TOU Rates Residential Residential Single Family Single Family Small Small Small Multi Family Multi Family Residential Residential Commercial Commercial Commercial Rebates Single Family Single Family Multi Family Multi Family 1 kW – 20 kW 1 kW – 20 kW 1 kW – 20 kW Medium Medium Commercial Commercial 20 kW – 200 kW 20 kW – 200 kW Smart appliances Connected Home Smart thermostats Energy information Larry Oliva, Director, Tariff Programs and Services, June 3, 2008
myPower Time- -of of- -Use Use – – Critical Peak Pricing Critical Peak Pricing myPower Time (TOU- -CPP) CPP) (TOU Summer 2007 Pricing Plan Summer 2007 Pricing Plan Weekends Weekdays June - September June - September $1.46 28 28 Critical Price 24 24 Price in cents per kWh Price in cents per kWh 20 20 23.7 ¢ High Price (On- 16 16 Peak) Standard Residential Rate Standard Residential Rate 12 12 8 8 8.7¢ 8.7¢ 8.7¢ Medium Medium Medium Price Price Price (Base Price) (Base 4 4 (Base 3.7¢ Low Price 3.7¢ Price) Price) (Night Discount) Low Price (Night Discount) 0 0 9 AM 6P M 10 PM 9 AM 10 PM 9 AM 9 AM 1 PM Time of Day Time of Day Presentation at National Town Meeting on Demand Response, Washington, DC, June 3, 2008 Fred Lynk, Manager – Market Strategy and Planning
What’ ’s state of play s state of play What Pilots, FERC- -NARUC Collaborative, NARUC Collaborative, Pilots, FERC 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
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