Demand Response Prof. S. A. Khaparde EE 772 Department of Electrical Engineering IIT Bombay 1 / 26
Motivation Demand supply balance : a critical aspect of electricity grid Challenges increase further with increase in competition at retail level market based problems : generators or retailers faces financial risk due to spot price volatility network based problems : TSO or DSO faces problem to maintain reliability during peak hours Traditionally, generating utilities has to compensate for load-generation mismatch by increasing/reducing generation. Utilities has to ensure security margin of generation for reliable operation of the system. 2 / 26
Motivation contd... These problems can be categorized as short-term problems : network based problems long-term problems : environmental effects due to usage of fossil fuel Demand side management (DSM) was introduced in 1980s by Electric Power Research Institute (EPRI) to address these problems. DSM includes variety of activities: load management, energy saving, energy efficiency etc. Short term problems can be tackled by efficient load management programs which are collectively referred to as Demand Response (DR). 3 / 26
Definition of DR According to Federal Regulatory Commission DR is defined as : ”Change 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 usage at times of high wholesale market price or when grid reliability is jeopardized.” DR can be considered as a virtual resource which can be exchanged between two groups of participants: Group I: retailers, DSO, TSO, Market Operator (MO) Group II: aggregator, Consumer 4 / 26
Types of DR There are three main types of demand response Emergency Demand Response : used to mitigate the potential for blackouts or brownouts during shortage of supply. This typically occurs on days of extreme hot or cold temperatures when heating and cooling systems are causing greater demand on the grid. Economic Demand Response : employed by utilities to avoid the significantly higher costs of producing energy during peak demand times, typically associated with ramping up ”peaking” power plants to meet higher than expected demand. Ancillary Service Demand Response : used to support the transmission of electricity to loads in a manner consistent with reliability requirements that are imposed on utility companies by industry regulators. 5 / 26
DR Strategies There are two common ways in which demand response events are executed by utility companies Direct Load Control demand response events involve the remote interruption of customers’ energy usage, in which power distributors cycle loads like heating, cooling, elevators, washing etc. ON and OFF at varying time intervals during peak hours of the day. Dynamic Pricing uses variable electricity rates to encourage customers’ voluntary curtailment during DR events. Utilities use a variety of pricing schemes including peak time rebates, critical peak pricing, and time of use (TOU) rates to curtail usage. 6 / 26
DR Programs 7 / 26
Classification of DR Demand Response Dispatchable NonDispatchable Reliability Economic Time Sensitive Pricing Energy Ancillary Capacity Voluntary Energy Price TOU, CPP, RTP, PTR, System Peak, Spinning, non DLC, I&C Emergency Demad Bidding/ Buy Response spinning reserves Back Transmission Tariff regulation 8 / 26
Classification of DR contd... There has been different ways to classify DR. And different programs differs on following parameters. customer’s freedom to respond penalty for not fulfilling the contract no of participants price structure defining base line factor of trust between customer and service provider 9 / 26
DR Benifits There can be following four major points of view to count the benefits of DR. system wide benefits : saving on capital investments reduction in system peak load increasing balancing resources rapid deployment of balancing resources TSO can benefit by being able to improve reliability of network DSO can use DR for managing network constraints by relieving voltage constrained power transfer, congestion, and thus can improve quality of supply. 10 / 26
DR Benifits contd... market benefits : reduced market power and improved efficiency reduce financial risk involved with the spot price volatility faced by retailers customer benefits : reduction in net price paid for electricity earning financial rewards for reducing consumption social benefits : Encouraging deployment of new technologies like distributed generation, storage promoting the habit of adjusting needs whenever required. 11 / 26
DR Benifits contd... 12 / 26
Impacts of DR Fig. describes the potential impact of efficiency and DR measures on customer service levels 13 / 26
Literature Pertaining to DR The literature related to DR can be broadly classified in three categories 1 : DR concepts and models DR literature directly applicable to wholesale markets DR literature directly applicable to retail markets 1 Balijepalli VSK Murthy, Vedanta Pradhan, S. A. Khaparde, and R. M. Shereef. ”Review of demand response under smart grid paradigm.” In Innovative Smart Grid Technologies-India (ISGT India), 2011 IEEE PES, pp. 236-243. IEEE, 2011. 14 / 26
Literature Pertaining to DR contd... The literature in the category of DR concepts and models mainly present concepts which guide incorporation of DR into system at various time-scales. Various conclusions are derived in the literature of this category which are, To ensure reliability of market-based DR models, effective DR mechanisms are needed: consumer must be charged on an hourly basis and vary consumption with certain level of responsiveness 2 If prices are not sifficiently different, it wil be difficult to justify investments on DSM 3 2 Fraser Hamish. ”The importance of an active demand side in the electricity industry.” The Electricity Journal 14, no. 9 (2001): 52-73. 3 Strbac Goran. ”Demand side management: Benefits and challenges.” Energy policy 36, no. 12 (2008): 4419-4426. 15 / 26
Literature Pertaining to DR contd... The incentives to the participants comprises of an energy reward, a reserve reward and a capacity reward which must be set so as to fully compensate cost of load reduction 4 Neither reliability based nor price based DR can individually maximize the benefits out of DR 5 The effects on distribution loads on transmission operation for an event of DR is also addressed 6 4 Yoo, Tae Hyun, et al. ”Development of reliability based demand response program in Korea.” Innovative Smart Grid Technologies (ISGT), 2011 IEEE PES. IEEE, 2011. 5 Nguyen, Duy Thanh. ”Demand response for domestic and small business consumers: A new challenge.” Transmission and Distribution Conference and Exposition, 2010 IEEE PES. IEEE, 2010. 6 Lu, Shuai, et al. ”Centralized and decentralized control for demand response.” Innovative Smart Grid Technologies (ISGT), 2011 IEEE PES. IEEE 16 / 26
Literature Pertaining to DR contd... Various conclusions derived in the category of DR framework directly applicable to wholesale market are as follow, The summary of DR implementation in wholesale markets are presented 7 The usefulness of DR in balancing the high penetration of renewable is discussed 8 A short term security constrained unit commitment(SCUC) model for scheduling generating unit with spinning reserve along with reserve provided by DR provider is also discussed. 9 7 Albadi, Mohamed H., and Ehab F. El-Saadany. ”A summary of demand response in electricity markets.” Electric power systems research 78.11 (2008) 8 Stadler, Ingo. ”Power grid balancing of energy systems with high renewable energy penetration by demand response.” Utilities Policy 16.2 (2008): 90-98. 9 Parvania, Masood, et al. ”Demand response scheduling by stochastic SCUC.” IEEE Transactions on smart grid 1.1 (2010): 89-98. 17 / 26
Literature Pertaining to DR contd... Most of the DR papers reported point to the retail market implementations. Scheduling of interruptible loads to achieve a system requirement of hourly curtailments is considered 10 A scheduling of household appliances equipped with renewable generator and stand alone battery is presented 11 The idea of integrating DR as a source of primary frequency control alonside that from dedicated generators is presented 12 10 MAA Pedrasa, et al. ”Scheduling of demand side resources using binary particle swarm optimization.” IEEE Transactions on Power Systems 24.3 (2009): 1173-1181. 11 Hubert, Tanguy, and Santiago Grijalva. ”Realizing smart grid benefits requires energy optimization algorithms at residential level.” Innovative Smart Grid Technologies (ISGT),IEEE, 2011. 12 Molina-Garcia, Angel, Franois Bouffard, and Daniel S. Kirschen. ”Decentralized demand-side contribution to primary frequency control.” IEEE Transactions on Power Systems 26.1 (2011): 411-419. 18 / 26
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