Transitioning from Demand Response to Distributed Energy Resources

Transcription

1 Transitioning from Demand Response to Distributed Energy Resources Ross Malme, Partner Skipping Stone September Boston Atlanta Houston Los Angeles Tokyo London

2 Table of Contents What is DR (Demand Response)? What is DER (Distributed Energy Resources)? What is Driving the Transition from DR to DER? What are markets for DER? Implications of transition DR to DER 2

3 What is Demand Response? 3

4 Definition of Demand Response Federal Energy Regulatory Commission (FERC) Changes in electric usage by demand-side resources 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. 4

5 Demand Response Analogy 450 People Show Up for the Flight Delta Airplane A330 Seats Only 440 People Airline Pays (e.g. ticket vouchers) 10 people to take a later flight 5

6 Demand Response Analogy Power Grid only has 440 MW Power Grid needs 450 MW Power Grid pays consumers to reduce 10 MW to balance supply & demand 6

7 Energy (MWh) vs. Capacity (MW) Energy= Quantity Capacity = Instantaneous Use 7

8 Typical DR Assets INDUSTRIAL Batch Processes Back Up Generation (BUG) COMMERCIAL RESIDENTIAL Direct Load Control Lighting Onsite Generation Building Automation Integration HVAC Source: Smart Thermostat Pumping Load Source: 8

9 Dispatchable DR Programs Dispatchable Reliability Economic Capacity Ancillary Energy- Voluntary Energy - Price Emergency Demand Bidding & Buy Back Direct Load Control Spinning Reserves Interruptible Demand Non-spinning Reserves Critical Peak Pricing (CPP) w/ control Regulation Load as Capacity Resource Source: ISO-NE 9

10 Non-Dispatchable DR Programs Non-Dispatchable Time Sensitive Pricing Time of Use (TOU) Critical Peak Pricing (CPP) Real Time Pricing (RTP) System Peak Response Transmission Tariff Source: ISO-NE 10

11 What are Distributed Energy Resources? 11

12 Definition of Distributed Energy Resources Electric Power Research Institute (EPRI) Distributed energy resources (DER) are smaller power sources that can be aggregated to provide power necessary to meet regular demand. As the electricity grid continues to modernize, DER such as storage and advanced renewable technologies can help facilitate the transition to a smarter grid. 12

13 Distributed Energy Resources Reimagining the Power System of the Future Source: EPRI 13

14 What is Driving the Transition from DR to DER? 14

15 Sustainability Drivers for DER Decarbonizing the Grid (Clean Power Plan) Source: EPA 15

16 Sustainability Drivers for DER Renewable Energy Integration Source: 16

17 Resiliency Drivers for DER Drive for Grid Resiliency Prevention Recovery Survivability 17

18 Technological Drivers for DER Internet of Things (IoT) Net Zero Homes (Rise of the Prosumer) AMI for More/Faster Data Source: Source: 18

19 Drop In Price for Solar Source: 19

20 Drop in Price for Storage Source: 20

21 What are the Markets for DER? 21

22 DER Markets Source: 22

23 Implications of Transition from DR to DER 23

24 What The Utility Industry Needs More Information To Work With More Advanced Distribution Management Systems Source: MicrogridKnowledge.com Source: Electric Power System and Smart Grid 24

25 What The Utility Industry Needs Utility Business Model Needs To Be Revisited Performance Metric Today Sanction Penalty Target Reward Today ~3-8 years TIME 25

26 What The Utility Industry Needs Source: wri.org 26

27 What The Utility Industry Needs State Regulators Utilities Outcomes Set performance goals Establish reward and penalty structure Meet goals Receive rewards and/or penalties Retail Level, e.g.: Reliable Service Customer satisfaction Equity Innovative third-party services Wholesale Level, e.g.: System-wide least cost Resource diversity Effective facilitation of open access Reliability Innovation 27

28 How Distributed Energy Resources Will Thrive Competition For Customer Attention Distributed Energy Resources Will Compete & Compliment Each other Need For Advanced DER Management Software Sources: appvoices.com Sources: fvbenergy.com Sources: itg.ge 28

29 The Big Pivot We do not inherit the earth from our ancestors, we borrow it from our children. ~ Native American Proverb The greatest threat to our planet is the belief that someone else will save it. ~ Robert Swan 29

30 The Big Pivot Good Planets Are Hard To Find 30