Demand Response as a Power System Resource

Transcription

1 Demand Response as a Power System Resource Richard Cowart Director, European Programmes RAP & SEDC Demand Response Symposium Brussels - November 6, 2013 The Regulatory Assistance Project rue de la Science 23 B Brussels Belgium Phone: web:

2 Regulatory Assistance Project (RAP) RAP is a global, non-profit team of experts providing technical and policy assistance to government officials on energy and environmental issues. RAP has advised governments in more than 30 countries and 50+ provinces and states, and now has major programmes in the US, China, India and Europe. European offices and staff are in Brussels, Berlin, Warsaw, and the UK. Experience with Demand Response in all of our regions: In China aggressive DR used to drive capacity factors >90% In India where DR often consists of rotating power cuts In US growth of systemwide DR in regional ISOs and markets In the EU supporting RES integration, better capacity markets, and the prosumer idea Richard Cowart is the Director of European Programmes for RAP, based in Brussels. Contact : rcowart@raponline.org Web:

3 Major points today 1. Evolution of Demand Response (DR) 2. Multiple values of efficiency and flexible resources 3. New challenge -- Integrating growing fractions of renewables 4. How to capture DR? Smart grids, capability markets that can tap DR resources 3

4 Traditional DR: Peak Shaving Source: 4

5 Demand Response: Change in Load Relative to Baseline in Response to System Needs 5

6 Demand Response Definitions evolve Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized. US FERC 2008 Demand Response Assessment Demand response -- Customer loads that can be modulated up or down in real time in response to wholesale market conditions, expressed either in wholesale prices, via frequency or voltage fluctuations, or through arrangements allowing direct control by the system operator or third party aggregator. -- RAP, Beyond Capacity Markets

7 Cents per kwh Efficiency and DR Have Many Production Energy Production Capacity Avoided Emissions Transmission Capacity Distribution Capacity Line Loss Reduction Avoided Reserves Plus Non-Energy Benefits including: Add l resource benefits (water), building durability, health & safety Power System Benefits Avoided Reserves Line Losses Distribution Capacity Transmission Capacity Avoided Emissions Production Energy Production Capacity * Note: numbers presented in graph are Illustrative

8 DR lowers power prices for everyone 8

9 Benefits of Demand Response: Avoiding T&D Upgrades Con Edison in New York City Seeking local distribution peak reductions Goal was to eliminate 149 MW across several areas by 2012 Decided to use demand resources - estimated to be less expensive and would avoid major disruptions in city (e.g. digging up streets) Employed EE, DG, thermal storage, fuel-switching Used competitive bidding by ESCOs to deliver Extensive M&V Costs born by all customers thru regulated (e.g., distribution network operator) tariffs Utility reports savings of over $1 Billion! 9

10 New Challenge: Integrating Variable Renewables Theme: DR and EE are essential partners with RES for a low-emissions, affordable power sector

11 The Challenge of Renewables Variability Net demand = gross demand minus demand effectively served by lowmarginal-cost, variable RES supply. <Southern UK 2030 w 28% PV & wind> 11

12 Marginal value of variable generation varies with technology and penetration Declining Capacity Value Declining Energy Value Declining Capacity Value Declining Energy Value Declining Capacity Value Declining Energy Value Declining Capacity Value: System becomes increasingly energy-limited in winter

13 PV PV Marginal value of PV is high at low penetration due to high capacity value Component ($/MWh) 0% PV 2.5% PV 5% PV 10% PV 15% PV 20% PV 30% PV + Capacity Value (Capacity Value in $/kw-yr) +37 (120) +34 (110) +27 (82) +13 (39) +8 (24) +4 (11) + Energy Value DA Forecast Error Ancillary Services (4) = Marginal Economic Value Single-axis PV and CSP without TES have similar relative magnitude of different components and similar changes in value of components with increasing penetration. Environmental Energy Technologies Division Energy Analysis Department

14 Net demand: more volatile than overall demand, lacking a repeatable pattern. Demand and availability of variable renewables can be moving in opposite directions 24/7/365 A challenging week for West Connect, USA, assuming 35% wind penetration 14

15 If a problem cannot be solved, enlarge it -- Dwight Eisenhower 15

16 Benefits of Demand Response Demand Response Can Reduce Grid Investments and Minimize Curtailment of Low-Carbon Resources Source: European Climate Foundation, Roadmap

17 Capturing the value of DR: market options and regulatory reforms

18 Traditional vs. Smart Grid Demand Response 18

19 Source: Faruqui, et al. (2012). Time-Varying and Dynamic Rate Design. Montpelier, VT: RAP. 19

20 Demand Response via Thermal Storage

21 Low-Tech Storage: Water Heaters Can Provide Rapid Response Frequency Regulation

22 Uncontrolled EV charging: no price signals or automated control technology Controlled EV charging: price signal plus automated control technology 22

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24 Capabilities market purchases flexible resources first (and pays more for them) Very quick response DR, some storage, fast turbines Mid-merit, slower plain vanilla firm capacity 24

25 Questions? Additional Sources: See Beyond Capacity Markets Delivering Capability Resources to Europe s Decarbonised Power System (Gottstein and Skillings, RAP-2012) What Lies Beyond Capacity Markets? Delivering Least- Cost Reliability Under the New Resource Paradigm (Hogan 2012) Demand Response as a Power System Resource (Hurley et al) Synapse & RAP (2013) Capacity Mechanisms for Power System Reliability (Keay-Bright, RAP 2013) Many other reports on DR, EE, and Power Market Design on the RAP website Richard Cowart, Regulatory Assistance Project Posted at questions to rcowart@raponline.com