Demand Response and the Utility of the Future

Demand Responseand the

Utility of the Future

Phil Davis, Senior ManagerDemand Response Resource Center Schneider Electric(404) 567-6090

http://blog.schneider-electric.com/main/category/smart-grid/

www.schneider-electric.us/go/utility

What is “Smart Grid”• A Marketing Term (IEC)• Communications enabled Electric Grid (lots of

people)• Interactive (Silicon Valley)• Health Hazard (Tin Hat Crowd)• A Colossal Bore (The Americal Public)• The strongest civilization altering force since sliced

bread (me and all the smart people)

What is “Demand Response”?

US Federal Position:

“It is the policy of the United States that time-based pricing and other forms of demand response….shall be encouraged, the deployment of such technology and devices….shall be facilitated, and unnecessary barriers to demand response participation in energy, capacity and ancillary service markets shall be eliminated.”

– US Energy Policy Act of 2005, Sec. 1252(f)

US DOE Demand Response Definition:

Changes in electric usage by end-use customers 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.

What is “Demand Response” Really?

Demand Response is how we do that:

Everything about an (intentional) electron’s journey is shaped by someone’s desire to accomplish a goal. Those goals are determined by the vast community of electron users; i.e., customers. In that sense, everything a utility does is Demand Response.

Electrons obey the laws of Physics:

They travel to ground over the paths of least resistance. Our job is to get them to do a little work along the way without wreaking havoc, which they like to do.

Now is the time to re-design demand response to meet societal and investor goals of efficiency and environmental stewardship

What does Energy Efficiency mean on a

Smart Grid?• Envelopes and Distribution are as efficient as

possible until the next kWh of savings is more costly than a kWh of generation

• Microgrids• Conservation Voltage Reduction• Robust interactivity (device to device or grid to grid)• Efficiency defined outside of economics is doomed

to failure

Market Drivers

We need to solve these challenges to make the difference!

Growing pressure on infrastructure Rising consumption

Volatile Wholesale Energy costs

Tighter economic pressure

Fiercer global competition

More ambitious environmental goals

Water shortages

Regulatory demandsComplex sourcing

options

Sustainability and Carbon Management

Economic Driver #1: Congestion

Economic Driver #2: Reliability

Commercial Building Facts:• Owner: Rockefeller Group Development Corp.

• Location: 1221 6th Ave, Mid Manhattan NY

• Peak Load: 12.5+ MW

• Size: 49 stories plus 4 sub floors and “attic”

• Tenants: Residential, Data Center, Restaurants, Commercial Offices

• Building Automation System – TAC Continuum

• DR – Originally enrolled 600kW in NYISO ICAP demand response program

Economic Driver #3: Energy Costs

Integrated Efficiency Planning

● Environment

● Procurement

● Reporting (SOX)

● Efficiency

● Safety

● Reliability

● Stability

From Left Field: The Utility of the Future

Monolithic

Spends Money to Make Money

Silo’d Functions

Banker

Distributed Operator

One Way

Central Plant

Efficient Operator Automated

CustomerEngaged

Capital AssetManager

Serves Customers to Make Money

Inevitable Changes• Infrastructure and service, not energy, become revenue drivers• Electrical attributes become the products• Regulatory regime changes• Distributed energy sources and microgrids• Key Standards adoption=business efficiency• Load shapes will matter

Designing for today’s energy environment will limit the life of business investments

Energy Efficiency=Economic Efficiency

1999 Groupe Schneider becomes Schneider Electric,focused on Power & Control

1975 Merlin Gerin joins Groupe Schneider

1988 Telemecanique joins Groupe Schneider

1991 Square D joins Groupe Schneider

1996 Modicon, historic leader in Automation, becomes a Schneider brand

2007 Acquisition of APC corp.

THANK YOU!Phil DavisSchneider [email protected]

404-567-6090

1836 Creation of Schneider at Le Creusot, France

19th century 20th century 21st century

2000 Acquisition ofMGE UPS Systems

2003 Acquisition of T.A.C

2005 Acquisition of Power Measurement Inc.

2003-2008Targeted acquisitions in wiring devices and home automation (Lexel, Clipsal, Merten, Ova, GET, etc.)

2008Acquisition of Xantrex, leader in renewable energy solutions

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