Managing Electrical Demand through Difficult Periods: California s Experience with Demand Response

Transcription

1 Managing Electrical Demand through Difficult Periods: California s Experience with Demand Response Greg Wikler Vice President and Senior Research Officer Global Energy Partners, LLC Walnut Creek, CA USA EDF Workshop: The Peak Power Problem Paris, France 24 June 2009

2 Presentation Outline A few words about Global Energy Partners Overview of California s electrical infrastructure and peak demand Demand response what it is and why it is so important for California Types of demand response programs Technology enablement efforts that enhance demand response programs Common barriers to demand response Page 2 December 17, 2007 Plans for the future Smart Grid, AMI, ARRA Page 2 24 June 2009

3 Global Energy Partners, LLC Economic and engineering consulting company serving the electric power industry to provide demand side technical services Headquarters: Walnut Creek, California (near San Francisco) 55+ Employees Page 3 December 17, 2007 Engineers (mechanical, chemical, electrical) Economists, business administrators Most with advanced degrees Employee-owned Areas of practice Energy planning and analysis Applied technology research Energy efficiency and demand response program implementation Greg Wikler: 14 years with the firm. Nationally recognized expert in the demand response area having run EPRI research programs, full-scale DR implementation programs for CEC, PG&E and SCE, and a participant in other industry-leading efforts Page 3 24 June 2009

4 California s Electrical Infrastructure Electrical generation is over 290,000 GWh/year Peak demand (noncoincident): approximately 65,000 MW 32,000 miles of transmission lines Electrical generation Page 4 December 17, 2007 Natural gas: 42% Large hydro: 19% Coal: 16% Nuclear: 13% Renewable resources: 11% Five utilities provide over 80% of electricity consumed: Pacific Gas & Electric ( PG&E ): 30% Southern California Edison ( SCE ): 31% San Diego Gas & Electric ( SDG&E ): 7% Los Angeles Department of Water & Power ( LADWP ): 9% Sacramento Municipal Utility District ( SMUD ): 4% Page 4 24 June 2009

5 California s Electrical Infrastructure (cont.) Electrical consumption by sector (2006) Residential: 32% (90,356 GWh) Commercial: 37% (103,712 GWh) Industrial: 16% (44,038 GWh) Other: 14% (Mining, Agriculture, Transportation, Streetlighting) California Independent System Operator (Cal-ISO) controls transmission of all power for the state s 3 IOUs plus smaller municipal systems (not LADWP, SMUD or most of the other municipal utilites in the state) Page 5 December 17, 2007 Page 5 24 June 2009

6 Demand Response How California Defines It Demand response is a resource that allows end-use electric customers to reduce their electricity usage in a given time period, or shift that usage to another time period, in response to a price signal, a financial incentive, an environmental condition or a reliability signal. Demand response saves ratepayers money by lowering peak time energy usage, which are high-priced. This lowers the price of wholesale energy, and in turn, retail rates. Demand response may also prevent rolling blackouts by offsetting the need for more electricity generation and can mitigate generator market power. Source: California Public Utilities Website: Page 6 December 17, 2007 Page 6 24 June 2009

7 Demand Response History of DR Efforts in California California deregulated its electricity market in 1998 Page 7 December 17, 2007 Market forces and poor regulatory policies left the electrical infrastructure in near collapse by early 2001 California initiated DR programs in 2001 following the energy crisis and the resulting havoc it created for California s electrical grid DR programs largely pilots (e.g., Statewide Pricing Pilot) and technology demonstrations (e.g., PG&E Auto-DR program) Policies and procedures were put into place to prioritize Demand Response above Renewable Resources, Distributed Generation and Clean Fossil-Fueled Generation (loading order) But implementation was limited IOUs adopted business-as-usual programs (i.e., traditional load management, some pricing) Page 7 24 June 2009

8 A Second Crisis Propels DR July 2006 brought about record temperatures (average temperatures of 40 o C statewide for nearly 2 consecutive weeks) The entire Western US electrical grid was under strain due to the heat storm Page 8 December 17, 2007 Traditional purchases from Pacific Northwest were limited Wholesale prices were at record levels California s electrical system was once again on the verge of collapse Air conditioning loads were high Aging distribution systems were also experiencing strain Policymakers ordered the utilities to initiate massive expansions of their DR program portfolios beginning in the summer of 2007 Page 8 24 June 2009

9 Types of DR Programs Currently in California Direct Control programs Page 9 December 17, 2007 Direct load control with switch (e.g., air conditioners, water heaters, etc.) Direct load control with automated controls (e.g., PCTs, energy management control systems) Price Response programs Critical peak pricing ( CPP )/peak time pricing ( PDP ) Peak time rebates Demand bidding/peak choice Real-time pricing Contracts with curtailment service providers Emergency/Reliability programs Interruptible/BIP Optional binding mandatory curtailment Cal ISO ancillary services Page 9 24 June 2009

10 DR Program Efforts Across the US Page 10 December 17, 2007 Page June 2009

11 Utility DR Plans ( ) PG&E 1,313 MW by 2011 Page 11 December 17, 2007 Budget $147 million Dynamic pricing mandatory for all customers with demands greater than 200 kw Testing pilot efforts with Cal-ISO on locational DR and ancillary services SCE Budget $234 million Program goals consistent with PG&E (listed above) Significant emphasis on integrating SCE s SmartConnect AMI program with existing and planned lineup of DR programs SDG&E Budget $60 million Four guiding principals: (a) simple programs; (b) comprehensive; (c) provide automated controls and (d) enable programs to transition to Cal-ISO programs in the future SMUD Beginning to expand DR efforts beyond pilots LADWP Limited interest due to excess capacity Page June 2009

12 Technology that Enhances Demand Response Impacts 1. Advanced Metering Infrastructure (AMI) AMI provides customers with so-called Smart Meters that enable access to pricing information that more accurately reflects actual market conditions and gives customers greater control over their energy use and bills Smart Meters replace conventional customer electric meters and represent an integral part of the state's demand response efforts Current deployment plans: Page 12 December 17, 2007 PG&E: 5.1 million smart meters to be deployed by 2012; to couple with CPP rate structure SCE: 5.3 million smart meters to be deployed by 2012; to couple with Peak Time Rebates SDG&E: 1.4 million smart meters to be deployed by 2011; to couple with Peak Time Rebates Page June 2009

13 AMI is Being Deployed Nationwide Page 13 December 17, 2007 Source: EEI Institute for Energy Efficiency (June 2009) Page June 2009

14 Technology that Enhances Demand Response Impacts (cont.) 2. Home and Building Automation Home Area Networks/Programmable Communicating Thermostats (PCTs) Page 14 December 17, 2007 Building standards being set by regulators Utilities deploying PCT-based direct load control programs Automated Demand Response (Auto-DR) A communication and technology platform designed to: Provide customers with automated, electronic price and reliability signals Provide customers with the capability to identify and automate site specific demand response strategies Improve the reliability of demand response programs so they can achieve the same operational status as conventional generation resources at a fraction of the cost Page June 2009

15 Auto-DR System Architecture Page 15 December 17, 2007 Page June 2009

16 California s Auto-DR Program Efforts Public Agencies: Expand the impact of DR to stabilize the power grid Page 16 December 17, 2007 Utilize advanced energy management infrastructures to improve DR program effectiveness through automation Commercialize Auto-DR program delivery Utility Auto-DR Goals: PG&E: Enable additional 45 MW by 2011 applied to Peak Choice program SCE: Expand Auto-DR technology to larger number of DR programs SDG&E: Offer default CPP customers Auto-DR options Lawrence Berkeley National Laboratory s Demand Response Research Center: DR Automation Server Standards being developed by industry consortium including national standards groups Page June 2009

17 Auto-DR Accomplishments by 2008 Approximately 55 MW of load reduction capability recruited with over half now tested and ready for program deployment; remaining customers to be fully Auto-DR capable by 12/31/08 Auto-DR proved its value during 2008 DR events: PG&E s CPP customers performed at 70% of shed capability during 11 events held in 2008 PG&E s DBP customers performed at 85% of bid amounts for 7/9/08 test event SCE s CPP customers performed at level of 15% greater than shed capability during 12 events held in 2008 Training and knowledge enhancement Over a dozen technical coordinator firms were trained Auto-DR system operations were enhanced Load assessment and settlement techniques refined Open standards and architecture developed and ready for publication (see Page 17 December 17, 2007 Page June 2009

18 Auto-DR Participants in California Industry Type Page 18 December 17, 2007 Number of Sites Estimated Load Reduction (kw) kw Percent of Total Biotechnology % Chemical Products 5 25, % Electrical Equipment 2 4, % Food Processing 7 1, % Government Building 27 2, % Healthcare % High Tech 22 3, % Miscellaneous % Office Buildings 16 1, % Petroleum Products 2 1, % Primary Metals 3 5, % Retail 98 6, % School % Transport Equipment 5 2, % Total ,377 Over 200 service accounts representing 14 different types of industries Baseline peak demand representing over 150 MW Estimated demand reduction at 55 MW Average reduction of 36% (mainly driven by large industrial participants) Average facility reduction of 20% (for non-industrial participants) Page June 2009

19 Makeup of Auto-DR Participants Program Participants by Industry Type 2.5% 2.5% 1.0% 2.0% 2.5% 3.5% 13.4% Biotechnology Chemical Products Electrical Equipment Food Processing Government Building Healthcare High Tech 2.0% Miscellaneous Page 19 December 17, % Prominent Segments: (based on # of customers): Retail Buildings Government Buildings High Tech Buildings 1.0% 1.5% 7.9% 10.9% 1.0% Office Buildings Petroleum Products Primary Metals Retail School Transport Equipment Page June 2009

20 Technology that Enhances Demand Response Impacts (cont.) 3. Smart Grid Very early stages of development in California AMI plays significant role Major connection to ARRA efforts Page 20 December 17, 2007 Source: Energy Central, 2009 Page June 2009

21 Importance of Applications/Components for Implementing Smart Grid/Intelligent Utility Page 21 December 17, 2007 Page June 2009

22 Smart Grid Link to ARRA The American Recovery and Reinvestment Act ( ARRA ) of 2009 defines smart grid functions for the purposes of funding projects to include the following (note emphasis added):..(4) The ability to sense and localize disruptions or changes in power flows on the grid and communicate such information instantaneously and automatically for purposes of enabling automatic protective responses to sustain reliability and security of grid operations.. (6) The ability of any appliance or machine to respond to such signals, measurements, or communications automatically or in a manner programmed by its owner or operator without independent human intervention. (8) The ability to use digital controls to manage and modify electricity demand, enable congestion management, assist in voltage control, provide operating reserves, and provide frequency regulation. Page 22 December 17, 2007 Page June 2009

23 Common DR Barriers Regulatory: Regulatory barriers are caused by a particular regulatory regime, market design, market rule, or the demand response program itself. They can be divided into three subcategories: general, wholesale-level, and retail-level. Economic: Economic barriers refer to situations where the financial incentive for utilities or aggregators to offer demand response programs, and for customers to pursue these programs, is limited. Technological: Potential technological barriers to implementation of demand response include the need for new types of metering equipment, metering standards, or communications technology. Other: Some additional barriers do not fall into the categories described above. These are generally related to customer perceptions of demand response programs and a willingness to enroll. Page 23 December 17, 2007 Source: Federal Energy Regulatory Commission, National Assessment of Demand Response Potential (June 2009) Page June 2009

24 Long-Term DR Plans for California DR programs: Over $500 million proposed to be spent over the next 3 years with transition toward dynamic pricing (PUC decision pending) AMI: All of the state s conventional meters will be replaced with Smart Meters that will allow consumers to better understand their electricity usage Smart Grid: Most of the state s utilities are applying for ARRA grant funding ($4.5 billion available nationwide) with the intention of: Page 24 December 17, 2007 Demonstrating various aspects of Smart Grid including distribution-based DR and intermittency of renewable resources ($615 million available) Investing in massive technology deployments drawing from existing DR infrastructures ($3.375 billion available) Page June 2009

25 Merci beau coups! Contact Information: Greg Wikler Global Energy Partners, LLC 500 Ygnacio Valley Road, Suite 450 Walnut Creek, CA USA Tel: