The Role of Energy Efficiency and Other Demand Resources in Helping Meet the Region s

Transcription

1 The Role of Energy Efficiency and Other Demand Resources in Helping Meet the Region s Reliability Needs Susan E. Coakley Executive Director Northeast Energy Efficiency Partnerships, Inc. Northeast Power Coordinating Council September 24, 2008

2 About NEEP Overview The Growing Role of Demand Resources in Reliability Markets Value of Integrating Demand Resources into Capacity Markets M&V Requirements and Experience to Date Developing Common EM&V Protocols: Regional and National Efforts Northeast Energy Efficiency Partnerships, Inc.

3 Northeast Energy Efficiency Partnerships Facilitating partnerships to advance energy efficiency. Regional non-profit organization since 1996 Serving New England, New York, Mid-Atlantic NEEP Mission: Promote the efficient use of energy in homes, buildings and industry in the Northeast U.S. through regionally coordinated programs and policies to achieve a cleaner environment and a more reliable and affordable energy system. Primary Audiences Served: State Policy Makers Efficiency i Program Administrators i t Approach: Strategic regional collaboration to overcome barriers to efficiency public policies and efficiency programs.

4 NEEP Funding: Northeast Energy Efficiency Partnerships Regional Sponsors Summit/ Other 14% Regional Sponsors: National Grid NYSERDA LIPA Federal Efficiency Vermont 40% 20% Efficiency Maine Private Foundations Northeast t Utilities 26% NSTAR Gas and Electric Federal Funding US DOE US EPA United Illuminating NJ Board of Public Utilities

5 Integrating Demand Resources into Power System Operations Types of Demand Side Resources: Load Curtailment Emergency Generators Load Management Distributed Generation Demand Response Energy Efficiency New!

6 Integrating Demand Resources into Power System Operations Several Areas of Integration: System planning and forecasting Wholesale Energy Markets Wholesale Capacity markets Demand Resources participation in Future Capacity Demand Resources participation in Future Capacity Markets New!

7 Integrating Demand Resources into Wholesale Capacity Markets Active Projects - Demand Response: Designed to reduce peaks, can reduce load based on real-time system conditions or ISO instructions Proven reliability resource with increasingly gy improving technologies demonstrate reliability of resource. Mature market with range of service providers that use building integrated controls primarily lighting and HVAC to control loads

8 Integrating Demand Resources into Wholesale Capacity Markets Passive Projects - Energy Efficiency, load management, distributed generation: Designed to save energy, energy during peak hours help fulfill forecasted capacity requirements Does not reduce load based on real-time system conditions Provides permanent peak demand reductions when end use matches to peak capacity. Rigorous M&V standards d developed d and years of M&V experience. Mature resource especially in states with ratepayer funded programs.

9 Demand/Load Response Programs Impacts are Real Current Impacts: ISO-NE: 1,674 MW of load response resources ready to respond on 3/18/2008 Registered and approved by ISO-NE Appropriate metering and communications systems, and meter data to determine baseline Reduce LMP by $.31/MWh across New England NY-ISO: 2,243 MW of load response resources ready to respond May 2008 Emergency DR, On-Call Special Case Resources (SCR) and Day Ahead Program

10 Demand/Load Response Programs Impacts are Real Current Impacts: PJM Demand Response Programs: Energy Markets Load Curtailment voluntary + day ahead Re- August 2, 2006 PJM Record Peak Day: Voluntary curtailments reduced wholesale energy prices by more than $300 per MWh during the highest usage hours. All customers will benefit from the dramatic price reductions because future longer-term electricity sales are based on prices set in the real-time market, where prices were lower as a result of demand response Summer 2008 Capacity Commitments 3,490 MW from 2258 sites Andrew L. Ott, PJM vice president - markets.

11 Integrating Demand Resources into Wholesale Capacity Markets The Value of Energy Efficiency: Less expensive than supply Lots of it available Mature and well understood Meet reliability + energy + environmental goals (multi-benefits)

12 Impact of EE on Reducing Market Prices $9.00 $8.00 New Lower Forecast Market Price -month $7.00 FCM in $/kw- $6.00 $5.00 $4.00 Existing MW - Price Takers Existing MW bidders MW DSM Bidd New Peakers e Cumulative Supply Bids Installed Capacity Requirement Cumulative Supply Bids +525 MW of DSM $ ,000 22,000 24,000 26,000 28,000 30,000 32,000 MW bid Avoided Energy Supply Costs in New England, Synapse Energy Economics, 2007 Final Report

13 Demand-Side Resources in Future Capacity Markets: ISO-NE: Forward Capacity Market (FCM) first in US to include energy efficiency i Feb 2008 Includes efficiency, load management, distributed generation, demand response Market rules set based on policy of comparability Rules and M&V Manual developed d with stakeholder input PJM Reliability Pricing Model (RPM): Demand response included in first two auctions PJM Staff Proposal to include efficiency i in future RPM auction May 2009

14 ISO-NE Forward Capacity Auction #1: New Demand Resource MW Cleared By Measure Type By Participant Type RT EG % Load Mgt % DG Fossil % DG Renewable 0.2 0% EE % Utility % Quasi- Govt % Total Demand Resources Cleared: 1, MW New Supply Resources Cleared: 626 MW Merchant % Source: ISO New England

15 Demand Response in PJM Capacity Market Cleared Cumulative Results May RPM Implemented MW / / / / / / /2012 Delivery Year Auto. Load Management RPM, Interruptable Load RPM, Demand Resource Source: Andrew Ott, PJM June 2008

16 Energy Efficiency as a Capacity Resource Efficiency as comparable resource: Must provide resource during peak period Market value for life of measure Penalty for non-delivery comparable to other capacity resources Measurement and verification to document impacts Northeast Energy Efficiency Partnerships, Inc.

17 Energy Efficiency EM&V Experience Based on decades of state program and merchant M&V Systematic regulatory and stakeholder review Established process of M&V planning, implementation, and reporting Public M&V reports/studies and published conference proceedings International Performance Measurement and Verification Protocols (IPMVP) developed for merchant performance contract projects Federal Energy Management Program M&V Guidelines - for federal performance contracts t ASHRAE M&V Guidelines ISO-NE M&V standards for FCM Northeast Energy Efficiency Partnerships, Inc.

18 Key M&V Questions Is the energy efficiency measure installed and in use? What is the reduction in connected kw? What is the coincidence of kw reduction with system peak (performance hours)? Over the commitment period, is the EE measure still installed and providing the demand reduction value? Northeast Energy Efficiency Partnerships, Inc.

19 ISO-NE M&V Manual Demand Reduction Calculation Methods Baseline Methods Statistical Sampling and Precision Measurement equipment standards Monitoring parameters Data Collection, validation & management Monthly Performance reporting Independence and auditing ne.com/rules_proceds/isone_mnls/index.html mnls/index

20 Regional EM&V Forum A regional technical forum to assist Northeast and mid-atlantic states to overcome barriers to cost-effective demand-side resource procurement through the development and use of consistent EM&V protocols to estimate, track and report: Energy and demand savings Related costs and air emission impacts

21 Regional EM&V Forum cont. Project convened, facilitated, and managed by NEEP Scope: New England, NY, mid-atlantic states NECPUC and MACRUC resolutions supporting regional EM&V forum Forum three-year plan - $1.5m-$1.7m annual budget Stakeholders: state policymakers, program admin, merchant ESCOs/providers, ISOs/RTOs, large customers, fed agencies EM&V Forum will build from and coordinate with other protocols experience/developments in country

22 Regional EM&V Forum - Structure and Governance Forum Steering Committee: NEEP Convene facilitate Project and Steering Committees NEEP Board representation on Steering Committee Develop forum plans and budgets Fiscal agent for Forum projects Support Forum funding Provide admin + organizational Endorse for state adoption protocols and support and project staff materials developed through Forum Develop, issue RFPs for Provide clear, accountable governance Steering Committee and Project structure Ensure transparency (e.g., access to info, public agendas) Adopt provisions to protect confidential or market sensitive information and data Committees to retain third party contractors/consultants Manage project contractors Protocol Development Project Committees Research and Evaluation Information Access Forum Stakeholders Third Party Contractors/Consultants Advise protocol development Conduct coordinated research and evaluation; Develop and maintain forum website Develop and maintain on-line database for common protocols

23 National EM&V Standards Development North American Energy Standards Board (NAESB) M&V project: Wholesale Demand Response Oct 3 draft standards to be proposed, with voting in December. Lead by ISO/RTO staff Retail Demand Response draft standards d also in process, later schedule Energy Efficiency may be addressed in 2009

24 Final Thoughts Efficiency is a reliable capacity resource that can reduce wholesale market costs Integrating energy efficiency and demand response into the market requires treatment as a comparable resource Measurement and verification protocols for energy efficiency and demand response are well developed and ready as tools

25 For more information Susan Coakley, Executive Director Julie Michals, EM&V Forum Director