Demand Response on a. Randy Palombi General Manager CPower, Inc.

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1 Demand Response on a Communications Enabled Grid Randy Palombi General Manager CPower, Inc.

2 What we will cover 1. What is a Smart Grid? 2. What is Demand Response? 3. How does a Smart Grid enable Demand Response? 4. What are the benefits? 5. How can you begin participating?

3 What is a Smart Grid? A smart grid will use long-distance, extrahigh-voltage transmission lines to move remote clean-energy resources to power load centers. This expanded and upgraded interstate transmission grid will connect to a modernized distribution system enabled with digital technology that delivers energy and detailed, real-time information This will enable consumers to constantly monitor and adjust their electricity use, while providing a pricing and control system to flexibly integrate new distributed energy resources

4 In a Smart Grid. Consumers will be an integral part of the electric system Consumers will have better choices that motivate different purchasing habits These choices involve new technologies, new information sources and new pricing and incentives Consumers will utilize demand response technologies to determine how and when they use energy Intelligence = kilowatt-hours

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6 Demand Response Demand response initiatives ensure electric supply reliability and improves price response by allowing end-use customers to see and respond to dynamic pricing and market conditions. DR Methods: Manual Semi-Automated Fully-Automated

7 Demand Response Where it comes from Buildings reduce energy demand temporarily Shut Downs: Total Plant Shut downs; turning off non-essential lights, fans, pumps, HVAC units, elevators Reductions: pre-cooling; global temperature re-sets, cycling Fuel Optionality: i.e. switching from electricity to steam Emergency Power: activate emergency generation (not renewable)

8 Demand Response Fully automated example: "Machine to machine" information translation is established between energy pricing server and building's Energy Management System (EMS). Tier 1: EMS automatically sheds load when price exceeds $0.10/kWh Tier 2: activated when price reaches $0.75/kWh Semi-automated example: Large facility (~1M FT 2 ) reduces whole building power demand by over 800 kw by raising zone temperature set point from 72 to 78F during event Digital Addressable Lighting Interface reduces lighting levels in corridor and storage areas during event

9 Broad Applicability

10 Valuable to Numerous Stakeholders Power Grid Benefits Electric Customer Benefits Reduces Power Grid Outages Lowers Wholesale Energy Costs Environmentally Responsible Positive Impact on Community Risk & Resource Management Flexibility to Meet Demand at Low Costs Financial Incentive Demand Response is one of the few technologies available that can address energy and environmental issues positively while creating economic development opportunities!

11 Average Participant Payments Ontario $70 - $160 MISO $45 - $65 New England $45 New York $12 - $82 California $62- $78 PJM $40 - $77 ERCOT $72 $156

12 Show me the $$$ 520,000 sg ft Class A Building $181,326 in DR Payments (5 years) $198,704 in total NYSERDA incentive funds received Received National PLMA Demand Response Award Outstanding Achievement by an End- User Major NY Hospital Campus 7.9M sq ft of facilities $1,367,464 DR Payments (4 years) $12,000,000 in annual electricity spend $1,250,000 annual Reserves Payments 12.4% reduction in annual electricity spend

13 Part of an Integrated Solution Permanent Efficiency (200kW impact) Original Load Shape Peak Load Management (1,000kW peak cap) Demand Response (200kW curtailment) 0 6:00am 8:00am 10:00am 12:00pm 2:00pm 4:00pm 6:00pm 8:00pm 10:00PM

14 Where can you start benefiting? Pay for new or enhanced building EMS from demand response market payments Get paid to install and then operate enabling technologies like auto-dr equipment Leverage new metering technologies to optimize manufacturing or production scheduling Use grid health alerts to avoid damage to building systems or equipment

15 Summary Demand response is a very low cost solution better enabled through access to information and data The smart grid provides timely access to information and data Information and data = $$$

16 Thank You! Randolph M. Palombi General Manager CPower, Inc. T. (714)