enabling customer demand management kevin evans president & ceo june 24, 2010
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Enabling Customer Demand Management
Kevin Evans President & CEOJune 24, 2010
Proprietary Company Information 2
• Legacy market: Grid Operator/Utility Centric “Command and Control” driven environment
• Emerging market: Hybrid market with traditional Command and Control augmented by more customer
centric “Inform and Motivate”
• Situational awareness is better than command and control Command and control may remain appropriate for ancillary services or emergency
peak reduction until telemetry provides real-time situational awareness
• Factors limiting customer participation Complex rules differentiated across all jurisdictions
Pricing implications not put in “easy to understand” context for customers
Enabling technology not available, too costly or too complicated to use
Evolution of Demand Response
Proprietary Company Information 3
DR Forces – RTO vs. Energy User
RTO / ISO Energy User
RTO needs and energy user
desires often at odds with each
other
Needs
• Reliability
• Predictability
• High Capacity Factor
• Efficient Markets
Desires
• Min. Operational Impact
• On Demand
• Flexibility
• Lowest Cost Electricity
Proprietary Company Information 4
Demand Resource
Enabling technology that inform and motivate energy
users and meet Grid’s needs
Demand Resource
Enabling technology that inform and motivate energy
users and meet Grid’s needs
Bringing Forces Together
Needs
• Reliability
• Predictability
• High Capacity Factor
• Efficient Markets
Desires
• Min. Operational Impact
• On Demand
• Flexibility
• Lowest Cost Electricity
Energy User RTO / ISO
Win/Win
• Curtailment Planning
• Adequate Compensation
• Situational Awareness
• Price Discovery
Proprietary Company Information 5
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09
ECIAll Others
RTLMP (PECO zone)5 day Moving Average (Noon to 6 PM)
0
50
100
150
200
250
300
01/01/0
7
03/01/0
7
05/01/0
7
07/01/0
7
09/01/0
7
11/01/0
7
01/01/0
8
03/01/0
8
05/01/0
8
07/01/0
8
09/01/0
8
11/01/0
8
01/01/0
9
03/01/0
9
05/01/0
9
07/01/0
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09/01/0
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11/01/0
9
2007 – 2008: Program Design & Testing Baselines, price signals Rebate or incentives
2009 – 2010: Getting the Rules Right Standardized baseline usage calculation Curtailment plans and telemetry FERC NOPR Compensation Market education & adoption
2011 and Beyond Wider adoption in other RTO’s
$48M
$27M
$1M
PJM moves from full LMP to LMP - G
History of Price Response in PJM
Proprietary Company Information 6
Assess Curtailment Capability
Install Telemetry
Set Notification Criteria
Notify Customer of Opportunities
Settlement and Payment
Accept, Modify, or Ignore
Test & Certify
Value Proposition
Putting Price Signals in Context
Market opportunities automatically monitored for customers and put in their perspective
Proprietary Company Information 7
• More than just a “price signal,” full value proposition quantified for customer
• Makes it easy for customers understand value from THEIR perspective
• Easy “what if” analysis of running modified scenarios
• Enables direct scheduling of load shift via BAS or other control tech
Value Proposition
Easily Evaluate and Modify Schedules
Proprietary Company Information 8
Real-time Price Discovery
13 14 15 16 17 18 19 20 21 22 23 24
05 6.04 5.73 13.00 15.38 16.54 12.49 5.12 5.41 5.90
10 6.07 4.92 8.56 13.01 13.94 18.89 13.18 5.63 13.50 5.41 5.07
15 6.10 4.84 8.69 14.08 14.22 17.43 11.17 12.29 5.53 14.30 5.82 5.08
20 6.36 6.44 14.10 12.35 12.18 11.18 12.30 12.68 5.82 4.60
25 8.30 9.10 14.83 12.47 8.24 10.61 7.48 5.21 4.61
30 4.17 8.74 15.26 12.19 11.90 8.01 10.45 6.49 4.81 3.59
35 1.78 7.74 12.99 13.65 11.57 11.69 7.53 10.45 6.48 5.02 3.60
40 1.71 7.65 7.87 15.13 13.64 9.48 7.54 8.26 5.92 5.02 3.87
45 10.96 7.65 7.87 15.51 13.38 11.05 7.49 9.50 5.63 4.71 3.62
50 5.90 7.64 15.90 13.32 7.50 5.02 4.87 3.62
55 5.88 7.61 11.50 5.47 17.97 5.04 5.35 3.62
00 3.58 13.00 16.06 13.03 17.10 5.22 5.85 5.90 3.36
5.32 6.79 8.95 14.50 13.69 14.25 11.94 8.94 9.28 8.03 5.28 4.21
2.55 1.39 1.92 1.22 0.99 2.89 2.63 2.84 3.97 3.59 0.41 0.82
Customer Wholesale Price Report
Realtime 5-Minute - USDA - HQ
5/26/2010
(Prices in ¢/kWh, x10 for $/MWh)
Date
Hourly Avg.
Std. Dev.
Proprietary Company Information 9
Real-time Performance Monitoring
Proprietary Company Information 10
Utility Based Dynamic Capacity Pricing
Average Historical Peak Loads and Act 129 Mandated Peak Demand Reductions as Measured in Megawatts
EDC Load 4.5% Reduction
Duquesne 2,518 113
Met-Ed 2,644 119
Penelec 2,395 108
Penn Power 980 44
PPL 6,592 297
PECO 7,899 355
West Penn 3,496 157
Total 26,524 1,193
2008 Top 200 Hours
100 hours of $100/MWh = $10,000Low
Incentive
Assume the capacity payment is $50,000/MWyr., the economic offer could be:
Medium Incentive 50 hours of $300/MWh = $15,000
High Incentive 50 hours of $500/MWh = $25,000
“Reconstituting” capacity payments to a “Pay for Performance” incentive
26,500
26,250
26,000
25,750
25,500
25,25025,000
Proprietary Company Information 11
Full Integration with Grid Operations
• Automatically processes notification from utility or grid operator
• Customer notification options via e-mail, voice message to phone, pager, etc.
• Processes 10,000’s of messages per minute
• Communicates directly with customer control systems
• Remotely starts processes or back-up generation
Independent System OperatorElectric Utility
, or
Retail Electric Supplier
Baselines
,
Usage Information
,
Settlement Information
Notification of System Events
Internet, Phone Connection,
Cellular Modem
Participant Site
On-Site Collection (e.g., data logger,
BAS, etc.)
Electric Meter (s)
Control System
Electricity Usage
Information
Control Signals
Electric Utility
Bidding, Notification, Performance, Settlement
Operations Personnel
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Proprietary Company Information 12
Automated Load Management
National Retailers
Main Office
Internet
Satellite LocationUtility Meter(s)
Andover Network Controller
Richards -Zeta Mediator
Submeters / CTs
Customer Managed
VPN
HVAC Lighting
Baselines
,
Usage Information
,
Settlement Information
Notification of System
Events &
Andover Continuum
ServerKey
MeteringEvents / Control
Satellite LocationUtility Meter(s)
Siemens / ALC / etc.
Richards -Zeta Mediator
Submeters / CTs
HVAC Lighting
Customer Managed
VPN
Price Info
DR Interface
Proprietary Company Information 13
Command & Control
Shaping the Smart Grid
• Communication & Control Network• Resource Energy Controller (REC)• Thermal Network• Electric Network• Virtual End Node (VEN)
E-ConnectEnergy Resource
Interface(ERI)
• Communication & Control Network• Resource Energy Controller (REC)• Thermal Network• Electric Network• Virtual End Node (VEN)
Inform & Motivate
Proprietary Company Information 14
Technology Enabled Demand Response
Demand Resource
Enabling technology that inform and motivate energy users and
meet Grid’s needs
Demand Resource
Enabling technology that inform and motivate energy users and
meet Grid’s needs
Win/Win
• Curtailment Planning
• Adequate Compensation
• Situational Awareness
• Price Discovery
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