Customer Services and the Changing Needs of the CA Electricity Grid. Stanford University May 5, 2015

Transcription

1 Customer Services and the Changing Needs of the CA Electricity Grid Stanford University May 5, 2015

2 Agenda Overview of DR CA Energy Policy DR in CA Other Markets System Needs Regional Resource Sharing? Questions 2

3 3 About EnerNOC- Energy Intelligence Software

4 EnerNOC s North American Demand Response Footprint Alberta, Canada Alberta Electric System Operator (AESO) Utah and Idaho Pacificorp Indiana, Michigan AEP I&M Idaho Idaho Power Company Kansas Midwest Energy Oregon Portland General Electric (PGE) New York Consolidated Edison New York ISO Mid-Atlantic, Virginia, West Virginia, North Carolina, Ohio, Illinois, Indiana, Michigan PJM Interconnection California Pacific Gas and Electric (PG&E) Southern California Edison (SCE) Arizona Tucson Electric Power Kentucky, Tennessee, Georgia, Alabama, Mississippi Tennessee Valley Authority (TVA) Louisville Gas & Electric and Kentucky Utilities (LG&E and KU) Colorado Xcel Energy New Mexico Public Service Company of New Mexico (PNM) Texas Electric Reliability Council of Texas (ERCOT) Florida Tampa Electric Company (TECO) 4

5 EnerNOC Acquisitions Energy Intelligence Software and International Growth Commercial Customer Engagement Pulse Energy International Demand Response Entelios AG Activation Energy 5 Energy Procurement & Management Entech USB World Energy Solutions

6 6 A Global Demand Response Footprint

7 Global Capability We meet you where you operate in 104 countries Countries Covered 7 Streaming data from over 14,000 enterprise sites Supporting 15 languages Global offices in 12 countries Managing one million bills annually Worldwide currencies and measurements

8 Comprehensive Utility EIS Solutions A single platform to serve all C&I customers, large and small, with 50+ utility partners globally Customer Engagement Engage customers through customized, timely, and valuable content Energy Efficiency Provide actionable insights delivered to customers and improved energy efficiency program adoption Demand Response Transform customers into a virtual power plant; create value added services and a tool for traders Operational Effectiveness and Customer Management Targeted program design, smarter marketing, seamless customer service 8

9 About EnerNOC Strong Financial Profile 2014 Revenues: $472M 2014 Adjusted EBITDA: $76.4M $246M in cash/cash equivalents on balance sheet Publicly traded on the NASDAQ) (ENOC) Over 1,000 employees and growing fast; multiple top places to work awards Full Value and Technology Offering Energy intelligence software = ~$5B market in U.S. alone Energy intelligence application platform addresses demand and supply-side, connects energy usage to currency Combines technology, managed services, and market access ~$200M invested to date in technology Proven Customer Track Record Thousands of enterprise customers across over 35,000 sites $1B in customer savings delivered to date Market leader in demand response To learn more, visit 9 Updated Proprietary and Confidential

10 10 CA Energy Policy

11 LTPP IEPR CA EPA CARB 11 FERC CAISO

12 NOW: Governor & Legislature Governor issues Executive Order to achieve GHG emissions reductions equal to 40% below 1990 levels by (April 2015) Governor describes energy policy vision in inaugural address (January 2015) Increase electricity generation from renewable sources by 50% by Increase energy efficiency in existing commercial building by 50% by Decrease petroleum use in the transportation sector by 50% by SB 350 (De Leon)-codifies the Governor s Inaugural Goals. SB 32 (Pavley)-directs CARB to establish new GHG emissions reduction targets for 2030 and SB 286 (Hertzberg)-lifts direct access suspension by 1/3 over 3 years with increased RPS requirement. AB 793 (Quirk)-incentivizes energy management technology adoption for residential and business customers. AB 1330 (Bloom)-establishes an EE and DR procurement standard. 12 Proprietary and Confidential

13 Main Drivers for Energy Policy Greenhouse Gas Emissions Reductions Renewable Resources EE & DR Electrification of the transportation sector Increased penetration of distributed energy resources Increased Customer Participation AMI Data Access/Privacy Reliability Meeting changing system needs (ramping) Better integration of resources SONGS replacement Water/Energy Nexus Drought 13 Proprietary and Confidential

14 14 DR in CA

15 Demand Response and Energy Efficiency Long History of EE and DR programs Joint Energy Agencies Energy Action Plan (2003, 2005, 2008) Establishes a loading order or preferred resources EE and DR, Renewable Resources and Distributed Generation Third party programs promoted in 2007 Legislation requires electrical corporation to procure all cost-effective, feasible and reliable DR and EE. DR and EE planning has happened outside of other procurement planning Until SONGS closure and SCE LCR RFO (2014) Commission adopts a policy to bifurcate DR (2014) Supply-Side Resource Load Modifying Resource 15 Proprietary and Confidential

16 Import of Being Either a SS or LMR DR Resource SS DR RECOGNIZED AS A RESOURCE BY CAISO FOR PLANNING PURPOSES LOAD MODIFYING RESOURCES WILL ADJUST THE DEMAND FORECAST NOT CLEAR HOW ALL OF THE VALUE OF A LOAD MODIFYING RESOURCE WILL BE RECOGNIZED If adjust actual monthly or annual peak Hard triggers Not clear if supply-side resources will have a premium over LMRs Not clear how flexible capabilities will be recognized 16 Proprietary and Confidential

17 Supply-Side DR Participate in CAISO s energy and/or ancillary services market Meet resource adequacy for system and local reliability purposes (Reliability Services Initiative) Approved by the Board of Governors Will be Submitted to FERC Meet flexible resource adequacy requirements (approved by FERC) Must-Offer Requirement in the day-ahead and/or real-time energy markets CPUC is testing a DR Auction Mechanism (DRAM) Third-party DRPs meet CAISO s resource adequacy requirements in exchange for a capacity payment Winning bidder must meet system RA requirements and Rule 24 requirements for participating in the wholesale market with retail customers First auction held in late summer/early fall 2015; delivery in June-December Proprietary and Confidential

18 SCE and PG&E Rule 24, SDG&E Rule 32 IOU Tariff that establishes the responsibilities between the IOU/LSE and the Demand Response Provider (DRP) Customer authorization for release of customer data Requirement that a DRP cannot register a customer to participate in the wholesale market who is participating in a utility retail DR program Requirement for the DRP/IOU to sign an agreement to abide by Rule 24 Requirement for the DRP to register with the CPUC Requirement for the DRP to follow consumer protections Requirement for the DRP to pay applicable charges to the IOU Requirement for the IOU to provide timely access to data for settlement purposes Requirement for the DRP to sign the CAISO/DRP Agreement, requiring the DRP to abide by CAISO s Tariff Requirement for the DRP to become or retain a scheduling coordinator for purposes of bidding or scheduling into the CAISO s energy and ancillary services market 18 Proprietary and Confidential

19 Why Hasn t DR Participated in the CAISO Before Now? Controversy over FERC Order 745 DR= generation FERC Order 719 (2008) FERC Order 719-A (2009) LMP if provides net benefit FERC Order 745 (2011) FERC Order 745-A (2011) CPUC Suspension Rule 24 Developed EPSA Challenge to DC Circuit DC Circuit overturns Order

20 Can prices drive the needed response? Don t chase ISO markets just because we can Look ahead to services we need going forward Eric Cutter, E3 Presentation 10/16/13 CPUC DR Rulemaking Workshop 20

21 21 Other Markets

22 PJM Screen Shot for BGE Zone 22 Proprietary and Confidential

23 23

24 ISO-NE Screen Shot Proprietary and Confidential

25 25 Proprietary and Confidential

26 26 System Needs

27 Load & Net Load (MW) Wind & Solar (MW) Conventional resources will be dispatched to the net load demand curve High Load Case 46,000 44,000 42,000 40,000 38,000 8,000 MW in 2 hours Load, Wind & Solar Profiles High Load Case January ,300 MW in 2 hours 13,500 MW in 2 hours 10,000 9,000 8,000 7,000 36,000 6,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 5,000 4,000 3,000 2,000 1,000 20, :00 1:30 3:00 4:30 6:00 7:30 9:00 10:30 12:00 13:30 15:00 16:30 18:00 19:30 21:00 22:30 0:00 Load Net Load Wind Solar 27

28 Advanced DR Scenario Looking at the ability to increase and decrease load throughout the day. Source: Investigating a Higher Renewables Portfolio Standard in California, Energy and Environmental Economics, Inc, January 2014, page

29 CAISO Market Notice Market Notice April 30, 2015 Categories Grid Operation Market Operations Notification of Ancillary Services Scarcity Event 4/21/15 Summary Ancillary services scarcity pricing was triggered on April 21, 2015 in the 15-minute market run. 29

30 Examples of Fast Response DR AutoDR demonstration for commercial customers Pilots for BPA, including load-following projects AutoDR with a UFR that responds to changes in frequency in 0.2 second Synchronized Reserves Market requires 10-minute response; many assets are automated Direct load control programs with automation for all customer classes Funding available for AutoDR technology to accelerate growth in existing DR programs Many assets automated to provide 10 min response; qualifies at WECC nonspinning reserves DR program implemented to accelerate adoption of existing DR tariff AutoDR resource providing ancillary services with <1 second response time 30

31 Balancing Both Spikes and Dips in Demand Case Study: Bonneville Power Administration (BPA) Wind Integration Pilot Pilot Background Pace of wind power development in the Pacific Northwest is exceeding BPA s expectations BPA has 3,000 MW of wind interconnected today, with 6,000 MW of requests in-process and another 15,000 MW of requests in-discussion Given that BPA has a total of 40,500 MW of capacity, this is dramatic penetration for the region EnerNOC is helping BPA use aggregated C&I end-use loads to providing a load following resource to mitigate the intermittency of wind power Pilot Parameters Direct load control, although customer will have manual override capability, as well as the ability to set specific temperature boundaries Loads controlled both up and down 24/7/365 resource availability Dispatch upon 10 minutes notice Maximum 30 minutes per event and 2 events per day Minimum 3 hours between events Other event limitations may be employed, subject to customer and utility needs 31 Copyright EnerNOC, Inc.

32 The need DR as a grid-balancing ancillary service European markets have unique requirements Increasing shares of fluctuating renewable energy resources create the need for flexible capacity to balance the grid. Intelligent aggregation (pooling) of individual demand-side flexible assets provide this reliable source of capacity. European Transmission System Operators (TSOs) increasingly welcome the participation of DR as a grid-balancing ancillary service in their reserve programs 32

33 Program types Criteria for ancillary services Amprion s Secondary Reserve Program had originally been designed for participation of generation assets. 33

34 34 Regional Cooperation?

35 EPA RICE NESHAP-allows BUGs for emergencies Overturned by DC Circuit MATS-Coal Retirements Challenged and upheld Clean Air Act Section 111(d) Final Rule Issued by June 30, 2015 Compliance by June 30, 2016 (with ability to extend for one or two years) 35

36 Studies on Operational Impacts of Renewable Integration Flexible capacity is one of several operational changes that need to be adopted to efficiently integrate renewable resources Expanded balancing area cooperation, including dynamic transfers Expand sub-hour dispatch and Intra-hour scheduling Improved forecasting of wind and solar Commit additional operating reserves Build or increase utilization of transmission Target new or existing DR to assist with variability It is more cost-effective to have demand response address the 89 hours of contingency reserve shortfalls rather than increase spin for 8760 hours of the year. Demand response can save up to $600M/yr ($510M/yr in 2009$) in operating costs versus committing additional spinning reserves. NREL WWSIS at p

37 Benefits top $11m since start of ISO s Energy Imbalance Market ISO to add Puget Sound Energy to the Energy Imbalance Market PSE to join ISO, PacifiCorp and NV Energy to find mutual savings for their consumers 37 APS: the Company believes that it is in the best interests of customers to participate in the EIM.

38 CAP & TRADE California and Quebec sign agreement to integrate, harmonize their cap-and-trade programs Is Ontario Next? 38 Proprietary and Confidential

39 39 Take Aways

40 What is Ahead? CA will continue to lead on GHG reduction policy Need agreement across the state as to what our energy priorities are That policy will open new opportunities for distributed energy resources State regulatory policy and the ways in which we plan for resources will also change It is necessary for resources to be integrated with system needs Need to incorporate customers in ways they have never been before If EPA policies stand, the rest of the nation will be changing as well Important to seek regional cooperation WE CAN DO THIS! 40 Proprietary and Confidential

41 41 Questions?

42 Mona Tierney-Lloyd, Sr. Director