1 Demand-Side Management Influence on Reliability NERC Demand-Side Management Task Force (DSMTF) Rick Voytas, Chair November 2007 Presented To The U.S.

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Demand-Side ManagementInfluence on Reliability

NERC Demand-Side Management Task Force (DSMTF)

Rick Voytas, Chair November 2007

Presented To The U.S. Demand Response Coordinating Committeee

National Town Hall Meeting

Washington, D.C.

June 3, 2008

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DSMTF Initial Charter

Review Current Data Collection methods.

Review Energy Efficiency influence on reliability

Evaluate existing DSM reliability performance metrics.

Discussion and summary of the above tasks integrated into a White Paper for review by the

1. Resource Issues Subcommittee2. Operating & Planning Committee at their December 3-4, 2007

● NOTE: Subsequent NERC task force formed to delve into data collection metrics

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DSM & NERC’s Data Collection

Demand Side Management (DSM)

Demand Response Energy Efficiency

Dispatchable Non-Dispatchable

Controllable Economic

Energy-PriceCapacity AncillaryEnergy-

Voluntary

Direct Load Control

Interruptible Demand

Critical Peak Pricing

w/Control

Load as a Capacity Resource

Spinning Reserves

Non-Spin Reserves

Regulation

EmergencyDemand Bidding & Buyback

Time-Sensitive Pricing

Time-of-Use

Critical Peak Pricing

Real Time Pricing

System Peak Response Transmission Tariff

Phase 1 Areas of InterestPhase 1 Areas of Interest

Phase 2 Areas of InterestPhase 2 Areas of Interest

NE

RC

Cur

rent

ly

Col

lect

s D

ata

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NERC Definition Of Reliability

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Reliability Discussion Continued - Avoided Capacity Concept

Avoided Capacity – measured as the amount of capacity that can be displaced while meeting the systems reliability criterion.

Cost vs Benefit

Avoided Capacity Benefit

ACB = (G + T) x D X CE

G - avoided cost of generation in dollars per kW year (incl. fixed O&M)T – avoided cost of transmission in dollars per kW per yearD – system coincident peak demand reduction associated with the program in kWCE – Capacity Equivalence of the potential program, expressed as kW of capacity value per kW reduced at system coincident peak

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Avoided Capacity

What is Capacity Equivalence (CE)?Capacity Equivalence is the true capacity value of a program (DSM, DR, wind,

hydro, etc)

Bottom line: 1 MW of DSM ≠ 1 MW of Gas ≠ 1 MW of Coal Generation

Why?The calculation of the amount of reserve MW at time of system peak may not provide an indication of the capacity, or load relief, that will be available throughout the entire year to meet customer requirements.

Two important properties: Determined at system level with adjustments for reserve margin and

distribution losses Varies according to the pattern of load relief afforded by the potential program

Capacity Equivalence

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Avoided Capacity

Capacity Equivalence

GenerationMax

CapabilityScenario #1

Summer

Scenario #2

Winter(1)

Scenario #3

Winter(2)

Coal plant #1 200 200 100 200Coal plant #2 300 300 300 0Combustion Turbine 50 50 50 50DR program 50 50 0 0

TOTAL 600 600 450 250

Customer Demand 490 390 390Percent Reserves 18% 13% N/A

(1) plant #1 is sheduled for maintenance

(2) plant #2 has an unforced outage

ACME Utillity Company

short capacity!short capacity!

Example using a DSM program that relies on AC reduction:

short reserves!short reserves!

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Avoided Capacity

History of Reserve Margin Earlier years of utility, “percentage reserve” evolved as the means for

communicating the “reliability” of a utility system

“Percentage reserve” at system peak established an amount of capacity in MW that would be available to the system at peak and throughout the year

Problem: The amount of capacity actually available at any point in time would be reduced due to random forced outages and scheduled maintenance

In 1978, many reliability councils adopt Loss Of Load Probability (LOLP) methodology

Most reliability councils adopted the industry standard of .1 day per year (LOLP = .1) .1 day/year = 1 day in 10 years = one day in 2500 workdays

Using a LOLP =.1, minimum reserve margins can be calculated

Reserve Margin

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NERC Historical On-Going Metrics and Data Requirements