ORNL/TM-2012/303 Eastern Interconnection Demand Response Potential November 2012 Prepared by Youngsun Baek1 Stanton W. Hadley1 Rocío Uría-Martínez2 Gbadebo Oladosu2 Alexander M. Smith1 Fangxing Li1 Paul N. Leiby2 Russell Lee2 1 Power and Energy Systems Group, Oak Ridge National Laboratory 2 Energy Analysis Group, Oak Ridge National Laboratory DOCUMENT AVAILABILITY Reports produced after January 1, 1996, are generally available free via the U.S. Department of Energy (DOE) Information Bridge. Web site http://www.osti.gov/bridge Reports produced before January 1, 1996, may be purchased by members of the public from the following source. 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Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. ORNL/TM-2012/303 Power and Energy Systems Group EASTERN INTERCONNECTION DEMAND RESPONSE POTENTIAL Young Sun Baek Stanton W. Hadley Rocio Uria-Martinez Gbadebo Oladosu Alexander M. Smith Fangxing Li Paul N. Leiby Russell Lee Date Published: November 2012 Prepared by OAK RIDGE NATIONAL LABORATORY Oak Ridge, Tennessee 37831-6283 managed by UT-BATTELLE, LLC for the U.S. DEPARTMENT OF ENERGY under contract DE-AC05-00OR22725 CONTENTS Page CONTENTS .......................................................................................................................................... iii LIST OF FIGURES ................................................................................................................................ v LIST OF TABLES ................................................................................................................................ vii! GLOSSARY ........................................................................................................................................ viii! ACKNOWLEDGMENTS ...................................................................................................................... x! EXECUTIVE SUMMARY .................................................................................................................... xi! 1. INTRODUCTION/OBJECTIVES .................................................................................................. 1! 2. DEMAND RESPONSE DEFINITIONS AND CLASSIFICATIONS ............................................ 3! 3.! REVIEW OF DEMAND RESPONSE ASSESSMENTS ............................................................... 5! 4.! DEMAND RESPONSE ASSESSMENT UPDATES AND ORNL-NADR ANALYSIS ............ 14! ! 4.1 UPDATED DEFINITIONS IN ORNL-NADR ................................................................... 14! ! 4.1 INPUT UPDATING ............................................................................................................ 17! ! 4.1.1 Baseline System Peak Load and Customer Population .......................................... 17! ! 4.1.2 Load and Population Growth Rates ........................................................................ 17! 4.1.3! Critical Peak Average Hourly Load ....................................................................... 18! 4.1.4! Participation Rates in Non-Pricing Programs ......................................................... 19! 4.1.5! Participation Rates in Pricing Programs ................................................................. 22! 4.1.6! Load Reductions per Participant ............................................................................. 24! 4.2 STOCHASTIC! SIMULATION ........................................................................................... 25! 4.2.1! Initial Sensitivity Analysis with the Original NADR Model .................................. 25! ! 4.2.2 Dynamic Pricing Demand Response Specification in the Updated NADR Model 27! 4.2.3! Monte Carlo Simulation of Demand Response under Dynamic Pricing ................ 28! 5. EASTERN !INTERCONNECTION DEMAND RESPONSE SCENARIO ANALYSIS RESULTS! FROM UPDATED! ORNL-NADR ....................................................................................................... 29! ! 5.1 EASTERN INTERCONNECTION (EI) RESULTS ........................................................... 29 5.2 SUMMARY OF MONTE CARLO SIMULATION RESULTS AT EI LEVEL ................ 31! 5.3! REGIONAL DISTRIBUTION OF DEMAND RESPONSE .............................................. 32! 5.4! REGIONAL RESULT PROFILES ..................................................................................... 37! 5.5! DEMAND RESPONSE SUPPLY CURVE FOR EIPC STUDY ....................................... 51! 6. DEMAND! RESPONSE COSTS ................................................................................................... 54! 6.1! INTRODUCTION ............................................................................................................... 54! ! 6.2 SUMMARY ........................................................................................................................ 54! 6.3! FINDINGS FROM PRIOR STUDIES OF DEMAND RESPONSE .................................. 54! 6.4! METHODOLOGY .............................................................................................................. 57! ! 6.4.1 Assumptions ........................................................................................................... 57! ! 6.4.2 Analysis of AMI Business Cases in Societal Cost Test Framework ...................... 58! 6.5 RESULTS! AND DISCUSSION: ........................................................................................ 60! 6.5.1! Brattle Group Comparison ...................................................................................... 62! ! 6.5.2 EPRI Comparison ................................................................................................... 64! 6.5.3! Discussion of Results according to Other Literature Findings ............................... 65! 7. SYSTEM BEN! EFITS OF DEMAND RESPONSE ...................................................................... 67! 7.1 BENEFIT! CASES FROM DEMAND RESPONSE ........................................................... 67! ! 7.2 DATA AND PROJECTIONS ............................................................................................. 70! 7.3! METHODOLOGY .............................................................................................................. 70! 7.4! RESULTS ............................................................................................................................ 71! ! 7.4.1 System Peak Impact ................................................................................................ 72! ! ! ! ! iii 7.4.2 System Reliability Impact ....................................................................................... 74 7.4.3 Generation Cost Impact .......................................................................................... 75 7.4.4! Environmental Impact ............................................................................................ 76! 8. CHALLENGES! TO DEMAND RESPONSE IMPLEMENTATION .......................................... 79! 9. POSSIBLE !NADR RESEARCH ENHANCEMENTS ................................................................. 82! 10.! REFERENCES ............................................................................................................................. 84! APPENDIX! A. DEMAND RESPONSE LITERATURE REVIEW SUMMARIES .................... A-1! APPENDIX! B. STATE-BY-STATE SCENARIO ANALYSIS RESULTS ................................ B-1! APPENDIX C.! BENEFIT-COST TESTS TYPICALLY APPLIED TO DR PROGRAMS ........ C-1! APPENDIX D.! COST AND DEVICE DEPLOYMENT ESTIMATES FOR CENSUS DIVISIONS! IN ORNL-NADR ! ..............................................................................................................................D -1! ! ! iv LIST OF FIGURES Figure Page Figure 1: Potential Reduction in Summer Peak Demand from Demand Response Programs in Eastern Interconnection (GW) ................................................................................................................................... 6 Figure 2: Dispatchable DR in Eastern Interconnection’s Reliability Councils/NERC Regions (2009-2019) ......................................................................................................................................................................