Customer Services and the Changing Needs of the CA ... · PDF fileCustomer Services and the Changing Needs of the CA ... •Governor issues Executive Order to achieve GHG emissions

Customer Services and the Changing

Needs of the CA Electricity Grid

Stanford University May 5, 2015

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Agenda

• Overview of DR

• CA Energy Policy

• DR in CA

• Other Markets

• System Needs

• Regional Resource Sharing?

• Questions

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About EnerNOC-

Energy Intelligence Software

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Indiana, Michigan

AEP I&M

EnerNOC’s North American Demand Response Footprint

New York

Consolidated Edison

New York ISO

Mid-Atlantic, Virginia,

West Virginia, North

Carolina, Ohio, Illinois,

Indiana, Michigan

PJM Interconnection

Florida

Tampa Electric Company

(TECO)

Kentucky, Tennessee,

Georgia, Alabama,

Mississippi

Tennessee Valley

Authority (TVA)

Louisville Gas & Electric

and Kentucky Utilities

(LG&E and KU)

Texas

Electric

Reliability

Council of

Texas (ERCOT)

New Mexico

Public Service

Company of New

Mexico (PNM)

Arizona

Tucson Electric Power

California

Pacific Gas and

Electric (PG&E)

Southern California

Edison (SCE)

Utah and Idaho

Pacificorp

Oregon

Portland General Electric

(PGE)

Colorado

Xcel Energy

Alberta, Canada

Alberta Electric System

Operator (AESO)

Idaho

Idaho Power Company

Kansas

Midwest Energy

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EnerNOC Acquisitions Energy Intelligence Software and International Growth

Commercial Customer Engagement

Pulse Energy

International Demand Response

Entelios AG

Activation Energy

Energy Procurement & Management

Entech USB

World Energy Solutions

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A Global Demand Response Footprint

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• We meet you where you operate – in 104 countries

Global Capability

Supporting 15

languages

Managing one million

bills annually

Worldwide currencies

and measurements

Countries Covered

Global offices in

12 countries

Streaming data from over

14,000 enterprise sites

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Comprehensive Utility EIS Solutions A single platform to serve all C&I customers, large and small, with 50+ utility partners globally

Customer Engagement

Engage customers through

customized, timely, and

valuable content

Demand Response

Transform customers into a

virtual power plant; create

value added services and a

tool for traders

Operational Effectiveness and Customer Management

Targeted program design, smarter marketing, seamless customer service

Energy Efficiency

Provide actionable insights

delivered to customers and

improved energy efficiency

program adoption

9 Proprietary and Confidential

About EnerNOC

Proven Customer Track

Record • Thousands of enterprise

customers across over 35,000

sites

• $1B in customer savings

delivered to date

• Market leader in demand

response

To learn more, visit http://www.enernoc.com

Strong Financial Profile

• 2014 Revenues: $472M

• 2014 Adjusted EBITDA: $76.4M

• $246M in cash/cash equivalents on

balance sheet

• Publicly traded on the NASDAQ)

(ENOC)

• Over 1,000 employees and growing

fast; multiple “top places to work”

awards

Full Value and Technology

Offering

• Energy intelligence software = ~$5B

market in U.S. alone

• Energy intelligence application

platform addresses demand and

supply-side, connects energy usage

to currency

• Combines technology, managed

services, and market access

• ~$200M invested to date in

technology

Updated 2 2015

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CA Energy Policy

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CA EPA

CARB

FERC CAISO

IEPR LTPP

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NOW: Governor & Legislature

• Governor issues Executive Order to achieve GHG emissions reductions equal to 40% below 1990 levels by 2030. (April 2015)

• Governor describes energy policy vision in inaugural address (January 2015) • Increase electricity generation from renewable sources by 50% by 2030. • Increase energy efficiency in existing commercial building by 50% by 2030. •Decrease petroleum use in the transportation sector by 50% by 2030.

• SB 350 (De Leon)-codifies the Governor’s Inaugural Goals.

• SB 32 (Pavley)-directs CARB to establish new GHG emissions reduction targets for 2030 and 2040.

• SB 286 (Hertzberg)-lifts direct access suspension by 1/3 over 3 years with increased RPS requirement.

• AB 793 (Quirk)-incentivizes energy management technology adoption for residential and business customers.

• AB 1330 (Bloom)-establishes an EE and DR procurement standard.

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Main Drivers for Energy Policy

• Greenhouse Gas Emissions Reductions • Renewable Resources

• EE & DR

• Electrification of the transportation sector

• Increased penetration of distributed energy resources

• Increased Customer Participation • AMI

• Data Access/Privacy

• Reliability

• Meeting changing system needs (ramping)

• Better integration of resources

• SONGS replacement

• Water/Energy Nexus • Drought

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DR in CA

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Demand Response and Energy Efficiency

• Long History of EE and DR programs

• Joint Energy Agencies’ Energy Action Plan (2003, 2005, 2008) • Establishes a loading order or preferred resources

• EE and DR, Renewable Resources and Distributed Generation

• Third party programs promoted in 2007

• Legislation requires electrical corporation to procure all “cost-effective, feasible and reliable DR and EE.

• DR and EE planning has happened outside of other procurement planning • Until SONGS closure and SCE LCR RFO (2014)

• Commission adopts a policy to “bifurcate” DR (2014) • Supply-Side Resource

• Load Modifying Resource

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Import of Being Either a SS or LMR DR Resource

• SS DR RECOGNIZED AS A RESOURCE BY CAISO FOR PLANNING PURPOSES

• LOAD MODIFYING RESOURCES WILL ADJUST THE DEMAND FORECAST

• NOT CLEAR HOW ALL OF THE VALUE OF A LOAD MODIFYING RESOURCE WILL BE RECOGNIZED • If adjust actual monthly or annual peak •Hard triggers •Not clear if supply-side resources will have a premium over LMRs •Not clear how flexible capabilities will be recognized

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Supply-Side DR

• Participate in CAISO’s energy and/or ancillary services market • Meet resource adequacy for system and local reliability purposes (Reliability Services

Initiative) • Approved by the Board of Governors • Will be Submitted to FERC

• Meet flexible resource adequacy requirements (approved by FERC)

• Must-Offer Requirement in the day-ahead and/or real-time energy markets

• CPUC is testing a DR Auction Mechanism (DRAM) • Third-party DRPs meet CAISO’s resource adequacy requirements in exchange for a capacity payment

• Winning bidder must meet system RA requirements and Rule 24 requirements for participating in the wholesale market with retail customers

• First auction held in late summer/early fall 2015; delivery in June-December 2016

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SCE and PG&E Rule 24, SDG&E Rule 32

• IOU Tariff that establishes the responsibilities between the IOU/LSE and the Demand Response Provider (DRP) • Customer authorization for release of customer data

• Requirement that a DRP cannot register a customer to participate in the wholesale market who is participating in a utility retail DR program

• Requirement for the DRP/IOU to sign an agreement to abide by Rule 24

• Requirement for the DRP to register with the CPUC

• Requirement for the DRP to follow consumer protections

• Requirement for the DRP to pay applicable charges to the IOU

• Requirement for the IOU to provide timely access to data for settlement purposes

• Requirement for the DRP to sign the CAISO/DRP Agreement, requiring the DRP to abide by CAISO’s Tariff

• Requirement for the DRP to become or retain a scheduling coordinator for purposes of bidding or scheduling into the CAISO’s energy and ancillary services market

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Why Hasn’t DR Participated in the CAISO Before Now? Controversy over FERC Order 745

DR= generation

• FERC Order 719 (2008)

• FERC Order 719-A (2009)

LMP if provides net benefit

• FERC Order 745 (2011)

• FERC Order 745-A (2011)

CPUC Suspension

Rule 24 Developed

• EPSA Challenge to DC Circuit

• DC Circuit overturns Order 745

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Can prices drive the needed

response?

• Don’t chase ISO markets just because we can • Look ahead to services we need going forward • Eric Cutter, E3 Presentation 10/16/13 CPUC DR Rulemaking Workshop

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Other Markets

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PJM Screen Shot for BGE Zone

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24 Proprietary and Confidential

ISO-NE Screen Shot 7-22-11

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System Needs

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Conventional resources will be dispatched to

the net load demand curve – High Load Case

Lo

ad

& N

et L

oa

d (

MW

)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

36,000

38,000

40,000

42,000

44,000

46,000

0:00 1:30 3:00 4:30 6:00 7:30 9:00 10:30 12:00 13:30 15:00 16:30 18:00 19:30 21:00 22:30 0:00

Load Net Load Wind Solar

Load, Wind & Solar Profiles – High Load Case

January 2020

Win

d &

So

lar

(MW

)

8,000 MW

in 2 hours

6,300 MW

in 2 hours

13,500 MW

in 2 hours

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Advanced DR Scenario Looking at the ability to increase and decrease load throughout the day.

Source: Investigating a Higher Renewables Portfolio Standard in California, Energy and Environmental Economics, Inc, January 2014, page 122

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CAISO Market Notice

• Market Notice • April 30, 2015

•

•

• Categories

• Grid Operation

• Market Operations

•

•

• Notification of Ancillary Services Scarcity Event 4/21/15 • •

• Summary

• Ancillary services scarcity pricing was triggered on April 21, 2015 in the 15-minute market run.

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Examples of Fast Response DR

Pilots for BPA, including

load-following projects Synchronized Reserves

Market requires 10-minute

response; many assets are

automated AutoDR demonstration for

commercial customers

Many assets automated to

provide 10 min response;

qualifies at WECC non-

spinning reserves

DR program

implemented to

accelerate adoption of

existing DR tariff

Funding available for

AutoDR technology to

accelerate growth in

existing DR programs

AutoDR with a UFR that

responds to changes in

frequency in 0.2 second

Direct load control

programs with automation

for all customer classes

AutoDR resource providing

ancillary services with <1 second

response time

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Balancing Both Spikes and Dips in Demand

Case Study: Bonneville Power Administration (BPA) Wind Integration Pilot

Pilot Background

• Pace of wind power development in the Pacific

Northwest is exceeding BPA’s expectations

• BPA has 3,000 MW of wind interconnected today, with

6,000 MW of requests ‘in-process’ and another

15,000 MW of requests ‘in-discussion’

• Given that BPA has a total of 40,500 MW of capacity,

this is dramatic penetration for the region

Pilot Parameters

• Direct load control, although customer will have

manual override capability, as well as the ability to set

specific temperature boundaries

• Loads controlled both up and down

• 24/7/365 resource availability

• Dispatch upon 10 minutes notice

• Maximum 30 minutes per event and 2 events per day

• Minimum 3 hours between events

• Other event limitations may be employed, subject to

customer and utility needs

EnerNOC is helping BPA use aggregated C&I end-use loads to

providing a load following resource to mitigate the intermittency of

wind power

Copyright 2013 - EnerNOC, Inc.

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The need DR as a grid-balancing ancillary service

European markets have unique requirements

• Increasing shares of fluctuating renewable energy resources create the need for flexible capacity to

balance the grid.

• Intelligent aggregation (pooling) of individual demand-side flexible assets provide this reliable source

of capacity.

European Transmission System

Operators (TSOs) increasingly

welcome the participation of DR

as a grid-balancing ancillary

service in their reserve programs

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Program types Criteria for ancillary services

Amprion’s Secondary Reserve Program had originally been

designed for participation of generation assets.

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Regional Cooperation?

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EPA

• RICE NESHAP-allows BUGs for emergencies

•Overturned by DC Circuit

• MATS-Coal Retirements •Challenged and upheld

• Clean Air Act Section 111(d) •Final Rule Issued by June 30, 2015

•Compliance by June 30, 2016 (with ability to extend for •one or two years)

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• Flexible capacity is one of several operational changes that need to be

adopted to efficiently integrate renewable resources

•Expanded balancing area cooperation, including dynamic transfers

•Expand sub-hour dispatch and Intra-hour scheduling

• Improved forecasting of wind and solar

•Commit additional operating reserves

•Build or increase utilization of transmission

•Target new or existing DR to assist with variability

• “It is more cost-effective to have demand response address the 89 hours of contingency reserve shortfalls rather than increase spin for 8760 hours of the year. Demand response can save up to $600M/yr ($510M/yr in 2009$) in operating costs versus committing additional spinning reserves.” NREL WWSIS at p. 22

Studies on Operational Impacts of Renewable

Integration

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ISO to add Puget Sound

Energy to the Energy

Imbalance Market PSE to

join ISO, PacifiCorp and

NV Energy to find mutual

savings for their

consumers

Benefits top $11m since start of ISO’s Energy Imbalance Market

APS: the Company believes that it is in the best

interests of customers to participate in the EIM.

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CAP & TRADE

• California and Quebec sign agreement to integrate, harmonize their cap-and-trade programs

• Is Ontario Next?

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Take Aways

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What is Ahead?

• CA will continue to lead on GHG reduction policy

• Need agreement across the state as to what our energy priorities are

• That policy will open new opportunities for distributed energy resources

• State regulatory policy and the ways in which we plan for resources will also change

• It is necessary for resources to be integrated with system needs

• Need to incorporate customers in ways they have never been before

• If EPA policies stand, the rest of the nation will be changing as well

• Important to seek regional cooperation

• WE CAN DO THIS!

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Questions?

Mona Tierney-Lloyd, Sr. Director

[email protected]

415.238.3788

www.enernoc.com