www.peakload.org

www.peakload.org

Demand Response Fundamentals, Evolution, and Industry Leaders

Ed Thomas, PLMA Executive Director [email protected] (707) 652-5333

Ed Thomas, PLMA Executive Director [email protected] – (707) 652-5333

Voice of Practitioner 1. Accenture 32.Consumers Energy Co. 63.Extensible Energy 94.NB Power 125.Skipping Stone 2. Advanced Energy 33.Cpower 64.Fairbanks Morse 95. New Hampshire Electric Coop. 126.SEPA 3. Alectra Utilities 34.CPS Energy 65.FleetCarma 96.Nexant 127.Snohomish PUD 4. Ally Energy Solutions 35.Crius Energy 66.Franklin Energy 97.Next Energy Party 128.Southern Calif. Edison 5. AESC 36. Customized Energy Solutions 67.Georgia Power 98.New Braunfels Utilities 129.SoCal Gas 6. Ameren 37.Dairyland Power Co-op 68.Google (Nest) 99.North Carolina EMC 130.Steffes Corporation 7. American Public Power 38.DTE Energy 69.Great River Energy 100.Northwestern REC 131.Tacoma Power 8. Apogee Interactive 39.Duke Energy 70.GridOptimize 101.NRG Curtailment Solutions 132.Tantalus 9. Applied Energy Group 40.E Source 71.Hawaiian Electric 102.NTC Corporate 133.Tendril 10.Arizona Public Service 41.E4TheFuture 72.High West Energy 103.Oglethorpe Power Corp 134.Tenn Muni Electric Pwr Assn 11.Aquanta 42.Eaton 73.Honeywell Smart Energy 104.Okla. Gas & Electric 135.Tenn. Valley Authority 12.Austin Energy 43.Ecobee 74.ICF 105.Olivine 136.The Brattle Group 13.AutoGrid Systems 44.EcoFactor 75. Power 106.Omnetric 137.Threshold 14.BGE, an Exelon Company 45.Ecotagious 76.IGS 107.Oncor Energy Delivery 138.Tierra Resource Consultants 15. Berkshire Hathaway Energy 46.Edison Electric Institute 77.Illume Advising 108.Opinion Dynamics 139.Tokyo 16.Bidgely 47.Efficiency Vermont 78.Indianapolis Power & Light 109.Orange & Rockland Utilities 140.Tri-State G&T Assoc. 17.Blackhawk Network 48.Electric Ireland 79.Integral Analytics 110.Pacific Gas and Electric 141.Tucson Electric Power 18.Bonneville Power Admin. 49.Emerson Climate Tech. 80.IPKeys Power Partners 111.PECO, an Exelon Company 142.United Illuminating 19.BPL Global 50.Enbala 81.Itron 112.Pepco, an Exelon Company 143.Utility Load Mgmt Exchange 20.BTES 51.Encycle 82.Jackson EMC 113.Portland General Electric 144.Vectren 21. Buffalo Niagara Medical Ctr 52.Enel X 83.JouleSmart Solutions 114.Powerley 145.Virtical Peaker 22.Carina Technology 53.Energy Datametrics 84.KCP&L 115.Rappahannock Electric 146.Waseda University 23.Central Hudson G&E 54.Energy Federation 85.Landis & Gyr 116.Research into Action 147.WaterFurnace 24. Centrica Business Solutions 55.EnergyHub 86.Leap 117.RF Demand Solutions 148.Westar Energy 25.Chelen PUD 56.Energy Solutions 87.Lockheed Martin 118.SMUD 149.West Monroe Partners 26.City of Tallahassee Utilities 57.EnerVision 88.Message Broadcast 119.Salt River Project 150.Whisker Labs 27.CLEAResult 58.Engie 89.Modesto Irrigation District 120.San Diego Gas & Electric 151.Xcel Energy 28.COI Energy Services 59.Entergy 90.Mosaic Power 121.Schneider Electric 152.Zen Ecosystems 29.Commonwealth Edison 60.EPRI 91.National Grid 122.Scope Services 153.Zeuthen Mgmt Solutions 30.Con Edison 61.ERS 92.NRECA 123.Sensus USA 154.ZOME Energy Networks 31.Connected Energy 62.Eversource 93.Navigant 124.Simple Energy PRACTITIONER ENGAGEMENT Fundamentals

5 Demand Side Management

Conservation

Energy Efficiency

Load Shape Impact of Residential Direct Load Control 6 Projected Load 5 Load on TOU Rate Demand 4 During CPP Event

3 kW Response 2 1

0 0:00 2:00 4:00 6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00

6 Demand Response – its “Fast EE” for the Grid

7 Why Utilities Need Demand Response

• Supply has to always meet demand • Must be available immediately • When demand may exceed supply • DR is needed to reduce demand

8 8 The Economic Definition of DR The “response” is based on a payment for either: • the willingness to change behavior (capacity), or • the actual change (performance) in the “demand” level of electric energy Payment can be based on the actual reduction controlled by: • the customer, or • programmed into the customer’s equipment responding to either: • a grid system operator reliability request, or • a price signal, or • on the availability to be on call

9 Demand Response in the Airline Industry

Bombardier CRJ-700 Only Has Capacity for 70 People

80 People show up Airline pays 10 people to take a for a flight on a later flight (e.g. provide an day of high travel incentive in the form of ticket demand vouchers)

Source: Skipping Stone 10 Demand Response in the Utility Industry

Power Grid only has 70 MW

Power Grid needs Power Grid pays 80 MW consumers to reduce 10 MW to balance supply & demand

Source: Skipping Stone 11 Policy Drivers of DR Programs

• Delaying investments in new generation capacity to meet Capacity Deferral reserve requirements

• Developing curtailment capability to address short- Improved Reliability term/emergency supply shortfalls

• Delaying investment in specific, localized substations and Deferral of T&D Upgrades feeders using DR as a demand side resource

• Reduction of system operating costs through fewer starts of Operational Cost Savings peaking units, reduced need for spinning reserve from (Economic Dispatch) generators, and economic dispatch of DR resources

Integration of Intermittent • A possible alternative to new generation or a more Renewable Resources economical way to provide ancillary services

• Commission rulings to have ESPs fund and operate DR Regulatory requirements programs or achieve DR curtailment goals

12 Source: Navigant Types of DR programs • Dispatchable = call or control or bid in advance • Wholesale market directed economic programs • Wholesale market directed reliability programs • Direct Load Control, e.g. automatic appliance shut-off • Interruptible Rates, i.e. lower rates for directed reductions

• Non-Dispatchable / Price-Responsive Demand = pre-set • Critical Peak Pricing – scheduled • Peak Time Rebate – built into a rate • Time-Of-Use Pricing – annual schedule • Dynamic Pricing – all of the above

13 Call on DR when it is needed

Peak-Day Load Shape Before and After Load Control 12,000 1000 MW 500 MW 11,000 250 MW

10,000 Use more DR

resources Megawatts 9,000 Use few DR Use few DR resources resources 8,000 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

Source: Navigant 14 DR Impact on the System Load Can be Nuanced

Load Shape Impact of Residential Direct Load Control • Manage pre-event load to get more during 6 event Projected Load 5 • Manage post-event Load on TOU Rate snapback to avoid new 4 During CPP Event peak

3 • Smooth out load kW reduction to give steady MW that operators can 2 count on 1 • Monitor indoor temperatures (for HVAC 0 loads) to ensure 0:00 2:00 4:00 6:00 8:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 customer comfort

Source: Navigant 15 Optimizing Multiple DR Resources Maximizes System Peak Reduction

Peak-Day Load Shape • Smooth load Before and After Load Control shape during 13,000 Projected Load control event 12,000 • Like a bull pen, 11,000 After Load Control Dispatched different loads can 10,000 be called when

9,000 needed Megawatts 8,000 Load control creates • Its all about the an 8-hour flat peak 7,000 load impact, not 6,000 what is controlled 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

Source: Navigant 16 Demand Response Evolution

17 Demand Response Evolution

• Largely manual control • Introduced To Wholesale • Provide Multiple Grid • Interruptible tariffs for Markets Services large C&I • Increased automation • Respond to Controls • 1-way Direct Load and/or Price Signals Control for Residential • Increased Precision • • Used for Capacity • Eventually Ancillary Services Distribution & Planning & • Behavioral/voluntary Options Transmission Relief Emergencies • Smarter Equipment • Introduction of Storage • 2-way communications • Migration to DER • Some Near Real-Time Visibility

18 Renewables Growth Creates DR Opportunities

Increase in load could allow generators time to ramp down

Reductions in load could allow generators time to ramp up

Source: California Independent System Operator 19 DR, Storage and Renewables Integration

Demand response and are sources of power Load met by Wind system flexibility that increase Load met by Flexible Generation the alignment between

Surplus Wind generation Load met by and demand. Inflexible Generation • Demand Response provides a means to shift demand to times of relatively high wind generation and low load • Storage Technologies can store This figure also shows how more flexible generation could excess wind generation for use in accommodate increased RE penetration and can provide an times of relatively low wind alternative or supplement to DR and storage. generation and high load

Source: GreeningtheGrid.org/ National Renewable Energy Laboratory Sept. 2015 20 DR is Part of Integrated Demand Side Management (IDSM)

MicroGrid A program design type that delivers the Energy benefits of EE to customers and DR to Efficiency Combined the grid using the same technology Heat & Power intervention and/or a linked incentive Demand while leveraging the same program Response DSM Solar PV delivery resources and infrastructure. Systems

Distributed Generation Grid- Interactive Water Thermal Heaters Storage & Batteries

Energy Storage

21 Thought Leadership Table of Contents

• Western Utility Perspectives of Demand Response, DER, Load Growth, and More - Mark Martinez, Southern California Edison, with Kent Walter, Arizona Public Service; Fabienne Arnoud, Pacific Gas & Electric; Brad Mantz, San Diego Gas & Electric; Richard Barone, Hawaiian Electric; and Darren Hanway, Southern California Gas • Leveraging Legacy Technology Platforms for the New DER World - Richard Philip, Duke Energy, with Wayne Callender, CPS Energy; Mitch Vanden Langenberg, Dairyland Power Cooperative; and Derek Kirchner, DTE Energy • The Future of DER: Energizing the Smart Home - Tom Kerber, Parks Associates with Rich Barone, Hawaiian Electric Company; Michael Brown, Berkshire Hathaway NV Energy and PLMA Board Chair; Tony Koch, Bonneville Power Administration; John Powers, Extensible Energy • DERMS Software Selection Group Discussion - John Brown, Skipping Stone with Rich Barone, Hawaiian Electric; Jim Musilek, North Carolina EMC; Derek Kirchner, DTE Energy; Lee Hall, Bonneville Power Administration; Paul Wassink, National Grid • DER Integration Challenges - John Powers, Extensible Energy, with Kelsey Horowitz, NREL; Rich Barone, Hawaiian Electric; and Matt Carlson, Aquanta • Reinventing Demand Response with DERs - Derek Kirchner, DTE Energy with Rich Barone, Hawaiian Electric; Troy Eichenberger, Tennessee Valley Authority; and Brenda Chew, Smart Electric Power Alliance • Save or Shift? How to Successfully Transition from EE to DSM/DER - Ray Martinez, Tucson Electric Power with Tom Hines, Tierra Resource Consultants • Three Utility Approaches to Gas Demand Response - Brett Feldman, Navigant with Charles Umberger, Con Edison; Paul Wassink, National Grid; and Andrew Nih, Southern California Gas Company

Featured Case Studies Learn more at www.peakload.org www.peakload.org

www.peakload.org

Demand Response Fundamentals, Evolution, and Industry Trends

Ed Thomas, PLMA Executive Director [email protected] (707) 652-5333

Ed Thomas, PLMA Executive Director [email protected] – (707) 652-5333