Fully Engaging Demand: Lessons and Insights from the Olympic Peninsula GridWise ® Demonstration Demand Response Town Meeting June 2-3, 2008 Washington,

Fully Engaging Demand: Fully Engaging Demand:

Lessons and Insights from theLessons and Insights from the

Olympic Peninsula GridWiseOlympic Peninsula GridWise®® Demonstration Demonstration

Fully Engaging Demand: Fully Engaging Demand:

Lessons and Insights from theLessons and Insights from the

Olympic Peninsula GridWiseOlympic Peninsula GridWise®® Demonstration Demonstration

Demand Response Town MeetingJune 2-3, 2008Washington, DC

Rob PrattPacific Northwest National [email protected]

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Going Beyond the Traditional Benefits: Raising Going Beyond the Traditional Benefits: Raising

Demand Response as a Strategic AssetDemand Response as a Strategic AssetGoing Beyond the Traditional Benefits: Raising Going Beyond the Traditional Benefits: Raising

Demand Response as a Strategic AssetDemand Response as a Strategic Asset

The broadly recognized, “traditional” benefits of demand response (DR) are: Minimize need for new generation &

transmission capacity Manage demand on peak days Mitigate wholesale price spikes

The strategic opportunity is: Engaging DR continually rather than intermittently

brings many additional benefits, including carbon Maximizing return on the DR investment is simply

good business (not just another peaking resource!)

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0 6 12 18 24

IBM

ancillary services

distribution congestion

transmission congestion

wholesale cost

JohnsonControls

Invensys

JohnsonControls

$

MW

Olympic Peninsula DemonstrationOlympic Peninsula DemonstrationOlympic Peninsula DemonstrationOlympic Peninsula Demonstration

Clallam PUD & Port Angelesn = 112, 0.5 MW DR

Clallam County PUD Water Supply District 0.2 MW DR

Internet broadband communications

MarketMarket

Sequim Marine Sciences Lab 0.3 MW DR0.5 MW DG

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1: 1: Continually Engage DR to Get Continually Engage DR to Get

Benefits at All Levels of GridBenefits at All Levels of Grid1: 1: Continually Engage DR to Get Continually Engage DR to Get

Benefits at All Levels of GridBenefits at All Levels of Grid

Multiple benefits are the key to the business case for DR Wholesale: provided demand reduction ~15% less than the

normal annual peak

Transmission: reduce transmission LMPs

Distribution: defer need for new capacity

Ancillary services: regulation and spinning reserve

Energy efficiency from DR

M&V for energy efficiency and carbon reductions

Real-time prices (RTP) provide the basis to continually and seamlessly engage DR to obtain multiple benefits

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2: RTP Focuses Customer Incentives When 2: RTP Focuses Customer Incentives When

and Where They Will Do the Most Goodand Where They Will Do the Most Good2: RTP Focuses Customer Incentives When 2: RTP Focuses Customer Incentives When

and Where They Will Do the Most Goodand Where They Will Do the Most Good… and in proportion to value they provide

Given choice between CPP/TOU and RTP, residential customers will sign up for and respond to 5-min. RTP if provided: Increased opportunity to save 10% on their electric bill

Technology that makes it simple to automate their preferred response

RTP incentives offer customers real, quantified incentive proportional to the degree & regularity of their response

Directly tying price/incentives to the value provided helps maintain appropriate, transparent financial equity between utility & customers

Readily incorporates backup/distributed generation, firm DR to localize and sustain distribution peak load reduction Help manage customer fatigue in multi-day events Limit high prices (they are generally the highest cost resource)

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3: Deploy DR in a Customer Friendly Manner3: Deploy DR in a Customer Friendly Manner3: Deploy DR in a Customer Friendly Manner3: Deploy DR in a Customer Friendly Manner

Being customer friendly means that the customer …

Is offered a choice of contract types (fixed-price, CPP/TOU, RTP …)

Maintains control of all DR that has impact limits fatigue (i.e., reduced participation if called upon too often)

Is offered a no-lose proposition compared to a fixed rate (e.g., by debiting a “shaping charge” against an up-front advance credit)

Is provided a simple, intuitive, semantic interface to automate their response – KISS principle highly applicable

Translated to price elasticityparameters in virtual thermostat

Is presented a unified engagement & value proposition for DR & efficiency

More Comfort

More Savings

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4.4. Fast-Acting, Short-Term Low/No-Impact Fast-Acting, Short-Term Low/No-Impact DR Can Provide Ancillary ServicesDR Can Provide Ancillary Services

4.4. Fast-Acting, Short-Term Low/No-Impact Fast-Acting, Short-Term Low/No-Impact DR Can Provide Ancillary ServicesDR Can Provide Ancillary Services

Using DR to provide short-term (minutes) regulation is a simple, inexpensive byproduct of an RTP network Easily synchronizes natural load cycles to follow need for regulation Excursions from customer’s desired thermostat set points are small Minimal, if any, discomfort means cost to buy response are very low

Autonomous under-frequency load shedding from Grid Friendly™ appliances was reliable and not noticed by users

Hour

normal fluctuations in loadDemand management to a capacity cap with real-time prices eliminated load fluctuations for 12 hours!

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5. Leverage DR Network to Provide 5. Leverage DR Network to Provide

Efficiency and Carbon BenefitsEfficiency and Carbon Benefits5. Leverage DR Network to Provide 5. Leverage DR Network to Provide

Efficiency and Carbon BenefitsEfficiency and Carbon BenefitsMeasure & verify customer-specific efficiency and carbon savings with unprecedented precision, in real-time Use time-series, end-use detail to

disaggregate load, provide much higher validity to savings estimates

Provide remote diagnostics for AC, heat pumps, commercial HVAC

Mine for site-specific DR and efficiency opportunities

Use the regulation capability of DR to ease operation and expense of high penetration of intermittent wind resources, especially regulation

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Engaging DR Engaging DR ContinuallyContinually (Rather than (Rather than

Intermittently) Intermittently) is the Key to Delivering is the Key to Delivering

More Value with the Same InvestmentMore Value with the Same Investment

Engaging DR Engaging DR ContinuallyContinually (Rather than (Rather than

Intermittently) Intermittently) is the Key to Delivering is the Key to Delivering

More Value with the Same InvestmentMore Value with the Same Investment

A DR network is a valuable asset and a substantial investment – keep it productive

Use it continually to maximize return on that investment

Ensuring less obtrusive impacts and maintaining a sense of control by customers are pre-requisites for more continuous use