Open Access Technology International, Inc. (OATI)

Transcription

1 1 Incentive-Compatible Solutions for Efficient Energy Consumption and Reliable Power System Operation Farrokh Rahimi, Ph.D. Vice President, Market Design & Consulting Open Access Technology International, Inc. (OATI) Prepared for Presentation at the Plenary Session: Shifting Smart Grid Focus to Customer Driven Performance Outcomes Great Lakes Symposium on Smart Grid and the New Energy Economy Galvin Center, IIT, Chicago, IL September 24-26,

2 2 Topics New Electricity Supply-Demand Paradigm Regulatory Issues Related to Demand-Side Participation An End-to-End Solution Framework for Consumer Participation in Energy Markets with Beneficial Impact on Power System Operations

3 Traditional Flow of Information and Power Wholesale Markets Grid Reliability System Economics Bulk Generation Demand Information Flow Load Forecast, Demand Bid 8, ,000 6,000 Load 5,000 Economic Supply 4,000 3,000 2,000 1,000 Power Flow

4 Emerging g New Paradigm Grid Reliability Supply Economics Environmental Requirements Wholesale Markets Demand-Side Resources Conventional Generation Bulk Generation Flow of Power & Ancillary Services Capacity, Energy, Ancillary Services Flow of Information & Controls Variable Generation Demand Response

5 Conventional Generation Dispatch Scenario 8,000 Load p 6,000 7,000 Ramping 5,000 W 3,000 4,000 Interchange Cycling MW ,000 Fossil Base Load 0 1,000 Nuclear Base Load

6 Impact of Variable Generation 8,000 7,000 Net Load Load Wind 6,000 5,000 MW 4,000 3,000 2,000 1,

7 Demand Response as a Dancing Partner of Variable Energy Resources

8 October 2008 March 2009 July 2010 March 2011 July 2011 April 2012 Regulatory Initiatives FERC Order 719 ISOs Treatment of Demand Response (DR): Equal Treatment of Supply and Demand Side Resources Curtailment Service Providers FERC Smart Grid Policy Statement and Action Plan Digital technology to enable real-time coordination of information from generation resources, demand resources, and distributed energy resources FERC National Action Plan DR FERC Order 745 Demand Response Compensation in Organized Wholesale Energy Market DR is paid by Location Marginal Price (LMP) FERC Order 1000 Regional Transmission Planning and Cost Allocation must consider more efficient or cost-effective alternatives, e.g., DR and Energy Efficient (EE) FERC NOPR on DR Measurements and Verification NAESB Phase II M&V and Baseline definitions June 2012 FERC Order Integration Of Variable Energy Resources Intra-hourly scheduling - 15 minute Forecast Data NARUC/FERC Smart Grid Collaborative Bridge Federal and State Level Initiatives and Regulations FERC Order

9 Balancing Energy Requirements with High Wind Power Generation under Hourly Scheduling Practices Representative Wind Power Generation Pattern Genetration Schedule Hourly Energy Imbalance bl Wind Ge neration (MW) 0 0:08 0:16 0:24 0:32 0 0:48 0:56 1:04 1:12 1 1:28 1:36 1:44 1:52 2 2:08 2:16 2:24 2:32 2 2:48 2:56 3:04 3:12 3 3:28 3:36 3:44 3:52 4 4:08 4:16 4:24 4:32 4 4:48 4:56 5:04 5:12 5 5:28 5:36 5:44 5: :08 0: 16 0:24 0:32 0 0:48 0:56 1:04 1: :28 1:36 1:44 1:52 2 2:08 2: 16 2:24 2:32 2 2:48 2:56 3:04 3: :28 3:36 3:44 3:52 4 4:08 4: 16 4:24 4:32 4 4:48 4:56 5:04 5: :28 5:36 5:44 5: Time Energy Imbalance (MW)

10 Reduction of Balancing Energy Requirements under Sub-Hourly Scheduling Energy Imbalance Levels Max Imb. Min Imb. Std Div Ramp Size MW min 15 min 1 hour

11 New Products and Practices Energy Imbalance (Energy Product) 5-15 Minute Product Similar to Load Following capability CAISO Flexible Ramping Product Proposal A 5 minute Ramp Up, and Ramp Down products Stakeholder process WECC Energy Imbalance Market Proposal Energy Imbalance Market (EIM) A reliability-constrained economic dispatch from voluntary offers of resource to deliver least-cost Imbalance Energy supply Enhanced Curtailment Calculator(ECC) A seams coordination tool, to manage reliability across the entire interconnection

12 Current Challenges Seams between Wholesale and Retail Markets Operational Scheduling practices and protocols Retail and Wholesale Coordination Pricing LMPs versus Retail Tariff Distribution Charges Distribution Congestion Rate-Case and Rate-Setting Process Impact of Distribution Operation Impact of Voltage Levels on Load Coordination of DR Operations and Distribution Automation

13 OATI websmartenergy Suite of Applications Balancing Authority / ISO webtrader webtrans Wholesales Scheduling and Trading; System Operations OATI websmartenergy TM/SM Variable Generation Management webrenewables RPS & GHG Tracking & Reporting webenvironmental Demand Response & Distributed Resource Management System webdistribute Asset Utilization Management webassets Meter Data Management webmeter EV Solar PV Thermal Storage Demand Response AMI

14 Generation Transmission Transmission Substation End-to-End Transactions of Information, Prices, and Power Congestion Power Bulk Bulk Generation Supply Transmission Grid es Bids; Schedule Bids, Offers; Awards Wholesale Markets Capacity, Energy, Ancillary Services Wholesale Pi Prices Merchant Operations Legend: Electricity Data Pricing Sub - Transmission Distribution Substation Distribution Ret tail Pow wer Distribution Grid Supply and Demand Demand Forecast Resource Availability Enrollment; Controls Consumers, Devices Retail Operations Retail ilrt Rates and Incentives

15 Virtual Power Plants closing the gap between Retail and Wholesale Operations Bulk Power Products Day-Ahead Energy Real-Time Energy Balancing Energy Non Spin Spinning Reserves Regulation Capability Data Telemetry Virtual Power Plant Grid Location Pmax, Pmin Ramp Rate Min/Max Up & Down Time Incremental Cost Curve Dispatch Instructions Retail Tariff Direct Load Control Time of Use Critical Peak Price Dynamic Pricing Commercial and Industrial Curtailment Contracts Etc

16 DR/DER Applications Objectives (System Operation) Economical Environmental Enhance Customer Reliability Objectives Objectives Objectives Choice Peak Load Reduction - Defer Capital Expansion Reduce Facility Loading Improved RPS Compliance Meeting Customer Need Shift Load to Lower Cost Period Provide Ramping and Balancing Energy Reduce GHG Emissions Enhance Service Innovation Trade and Market Opportunities Provide Ancillary Services and Regulation Serve Isolated Remote Load Improve Power Quality Provide for Micro-Grid Operation

17 Value of DR DR Benefits Overview Economic Reliability Environmental Social Energy: Load Shifting Peak Shaving Load Reduction Deferred Generation Investment Deferred T&D Investment Reduced O&M Costs Distribution Reliability: Lower SAIFI Lower CAIDI Power Quality System Reliability Capacity Ancillary Services Load Following Balancing Energy Improved Green House Gas Reduction Higher Renewable Portfolio Standard Compliance Renewable Energy Credits Enhanced Energy Independence Enhanced Economic Development Improved Customer Satisfaction Improved Customer Choice

18 Overall Benefit Ranges per MW of DR Generation Capacity Cost Savings Annual Savings per MW of DR: $40K - $120K $1,600 NPV: $300K - $900K per MW of DR $1,400 Note: NPV Cost of a CT ~ $600K per MW T&D Cost Savings Widely different among Regions Sample quoted number High Annual Savings NPV: $1.5M per MW of DR Low Annual Savings NPV: $200K per MW of DR Energy Cost Savings A few thousand dollars per MW of DR per year NPV Range: $50K - $200K per MW of DR Savings/Revenues from Ancillary Services A few thousand dollars per MW of DR per year NPV Range: $50K - $200K per MW of DR Total Cost Savings per MW of DR NPV: $600K - $2.8M per MW of DR $K $1,200 $1,000 $800 $600 $400 $200 $ Generation T&D Energy Cost Ancillary Services

19 Load Shifting Benefit Example (Based on CAISO RT Market LMPs July 01, 2009 to June 30, 2010) $ Average Summer Day RT LMP (Anaheim; June September) $90.00 $80.00 Average of Hours Ending 1 through 8: $20.50 Average of Hours Ending 14 through 21: $47.71 $70.00 LMP ($ $/MWh) $60.00 $50.00 $40.00 $30.00 $ $10.00 $ Hour of the Day Potential Impact of Load Shifting for the Months of Summer: Fixed Load Shift Schedule: $26,000/MW DR Optimal Load Shift Schedule (webdistribute): $49,500/MW DR

20 20 Closing Remarks New electricity supply-demand paradigm Increased use of renewable resources Increased demand-side participation Paradigm shift is in power system and energy market operations Variability and unpredictability of Variable Energy Resources (VER) Need for new products (ramping, load following, etc.) Possibility of end-to-end solutions Smart Grid technologies are available for extensive consumer participation p End-to-end incentive-compatible solutions are available (e.g., OATI webdistribute platform) Regulatory issues FERC Orders (719, 745, 1000, 764, etc.) facilitating participation of DR in wholesale markets and scheduling of VER Main issue: Local regulatory barriers

21 21 Questions? Thank You Farrokh Rahimi