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Integration of Demand Response with Renewable Energy for Efficient Power System Operation 1 Part B Tutorial Prof. Saifur Rahman Virginia Tech, USA PES ISGT Asia 20 May 2014 Kuala Lumpur, Malaysia

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Page 1: ISGT Asia Tutorial B.ppt - IEEE Web Hostingsite.ieee.org/isgt-asia-2014/files/2014/05/ISGT-Asia-2014... · Source: Primer on Demand‐Side Management, World Bank Document CRA No

Integration of Demand Response with Renewable Energy for Efficient 

Power System Operation 

1

Part B

TutorialProf. Saifur RahmanVirginia Tech, USA

PES ISGT Asia20 May 2014

Kuala Lumpur, Malaysia 

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(c) Saifur Rahman

Tutorial B

Part 3: Demand Response Technologies

•Demand response and demand side management (DSM) •Demand response technologies – supply side and demand side•Performance of demand response technologies

Part 4: Demand Response Planning and Operations

•Sample demand response programs in operation •Customer incentives and participation•Impact of demand response on the electrical load shape

2

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What is the Challenge ?

• It will be difficult to keep on building large central station power plants in response to traditional demand projections. The impact on fuel supply and the environment will be too high.

• We need to start thinking about what help we can get from energy conservation and renewable energy.

• Renewable energy cannot just be an afterthought. It needs to be an integral part of the plans for meeting the load.

3

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4

Operation Issues

• Intermittency

• Supply-Demand mismatch

• Demand Response to address the mismatch

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Basic Definitions

Peak Load ReductionActions taken to modify the level and pattern electricity consumption of consumers during “peak hours” or periods of very high demand: •minimize the operation of expensive peaking units•avoid transmission congestion costs•defer the building of new generation and transmission capacities.

(c) Saifur Rahman 5

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Basic Definitions, contd.

Demand Side Management (DSM)Activities and incentive programs implemented and administered by utilities to modify energy consumption and load shape of customers.  These include: load control, load shifting, energy efficiency and conservation. 

Demand Response (DR)Demand Response can be seen as Demand Side Management but on the customer’s terms, i.e. , the customer decides what loads to control and for how long, often in response to a economic/price signals or special requests by utility.

(c) Saifur Rahman 6

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DSM Load Shape Objectives

Source:  Primer on Demand‐Side Management, World Bank Document CRA No. D06090, 02/2005(c) Saifur Rahman 7

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Demand Response Definition

Demand Response is the set of actions taken by consumers to reduce their consumption of electricityand/or increase their own production of electricity in response to economic signals or dispatch requests.

(c) Saifur Rahman 8

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Demand Response ExamplesExamples of Demand Response actions include:  • reducing the duty‐cycles of HVAC and water heaters, 

• shedding load or shifting electricity usage to off‐peak hours and, 

• turning on the onsite back‐up generation (diesel or renewables).  

Demand Response is considered capacity, i.e., equivalent to a generator that can be dispatched by the utility to keep the grid in balance and maintain its reliability.  

(c) Saifur Rahman 9

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Energy Efficiency as Demand Response

Energy Efficiency (EE) measures, such as  one‐off installation of efficient devices and appliances as well as adoption of efficient processes and systems that provide long‐term and continuous reduction in electricity demand  can be considered as a form of Demand Response.  

(c) Saifur Rahman 10

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Energy Efficiency as Demand Response, contd.

EE measures require no action by customer once installed.  Examples include: replacing incandescent lighting with compact fluorescent  or solid‐state lighting,  installing building automation, installing adjustable speed drives for electric motors used in HVAC and industrial processes. 

However, EE measures need to be updated to the best‐available technologies every few years to qualify as Demand Response.

(c) Saifur Rahman 11

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Benefits of Demand Response• Demand Response is far cheaper than dispatching the peaking unit, often a natural gas‐fired turbine plant. 

• Demand Response can be dispatched and realized within 5‐10 minutes as compared to the 20‐30 minutes needed by a peaking unit turbine to ram up to full capacity.

• Demand Response helps reduce transmission congestions and electricity price volatilities thus enabling power exchanges in the wholesale market from regions with surplus to regions with shortage and ensuring the reliability of the system.

(c) Saifur Rahman 12

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Benefits of Demand Response, contd.

• Demand Response, unlike peaking thermal units, does not emit greenhouse gases and can be considered as clean energy.  

• Demand Response is more reliable than the capacity obtained from a single peaking power station, as it can be sourced from a large and distributed population.

(c) Saifur Rahman 13

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Some major benefits of DR are: Saving in generation investment, deferring T&D upgrades 

Energy efficiency   

Facilitating renewable energy integration 

Better equipment use (e.g. increase in load factor)    

DR and Smart Grid: Smart Grid technologies (e.g. smart meter) facilitate DR 

Benefits & Potentialin the US Market

(c) Saifur Rahman 14

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Potential  (US Federal Energy Regulatory Commission, FERC):

Existing DR capability: Can reduce 4% of US peak demand (810,000 MW in 2009)

DR could shave about 32,000 MW off US peak load in 2010 

Based on current industry best practices: 9% US electricity demand can be saved 

With improved DR: peak shaving could reach 14‐20% of the peak  

Benefits & Potentialin the US Market, contd.

(c) Saifur Rahman 15

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Types of Demand Response

Economic Response:  Capacity available on a day‐to‐day basis created through price signals to the consumer.  Response is voluntary.

Reliability Response:  Capacity on standby that can be called upon to maintain system reliability, also referred to as Contingency or Emergency Response.  Response can be both voluntary and obligatory (direct load control, interruptible load etc.)

Demand Response can be broadly classified into two:

(c) Saifur Rahman 16

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Demand Response Enabling Technologies

Some technologies enabling the Smart Grid

• Distribution Automation• Automated Metering Infrastructure (AMI)• Home/Building Energy Management• Programmable Lighting and Load Controllers• Embedded Controls and Communications• Home Area Networks (HAN)• Wide Area Networks (WAN)

(c) Saifur Rahman 17

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How is Demand Response Implemented? 

Demand Response Programs are often outsourced by utilities to third‐party providers called Aggregators or Curtailment Service Providers (CSP) who:•enroll customers in DR programs, •provide the technology and initial investment to customers•manage the Demand Response programs for customers•in return, take a share of the customer’s revenue

With the advent of the Smart Grid and its enabling technologies such as Automated Metering Reading (AMR) and  Home Automation Networks, utilities are increasingly bypassing Aggregators and beginning to provide Demand Response services themselves directly.

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How is DR implemented? 

DR Users• Independent System Operators (ISO)• Regional Transmission Orgs. (RTO)• Utilities

DR Sellers• Residential• Commercial• Industrial

DR Aggregators or Curtailment Service Providers• Enroll DR participants• Manage DR programs• Revenue Sharing

EnerNocNuEnergenAmerescoComvergeetc.

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How is Demand Response Marketed? 

• Demand Response capacities are considered same as generation capacities and are therefore being traded the same way, i.e., on day‐ahead markets operated by power exchanges, RTOs and ISOs.

• Aggregators can offer demand response capacity  to the market.  If cleared, customers will be paid the market clearing price.

• Demand Response capacities now fetch, by rule, the market price for electricity, known as the locational marginal price (LMP), when it is established to be cost‐effective to use them to cover for generation shortage.  (FERC Order 745, Docket No. RM10‐17‐000)

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Example DR Programs in Operation(PJM)PJM System: Regional transmission 

organization (RTO) serving 17 utility zones.

Gen. Capacity: 180,400 MW

Demand Response: 9,052 MW (2010‐2011)14,940 MW (2014‐2015)

Type:  Combined EE, economic and direct load control.

Managed by: Third party Curtailment Service 

Providers (CSPs),

(c) Saifur Rahman 21

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Example Demand Response EventBaltimore Gas and Electric, PJM 

Source: 2011 Final Emergency Load Management (ILR/DR) and Economic Demand Response summary, PJM

About 2,300 MWs of Demand Response were invoked at LMP ranging $200‐$500/MWh

(c) Saifur Rahman 22

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Example Demand Response Event(managed by a Curtailment Service Provider)

(c) Saifur Rahman 23

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DR Capacities of Major ISOs and RTOs

2009 2010Demand Response 

(MW) % Peak Demand Demand Response 

(MW) % Peak Demand

California ISO (CAISO) 3,267 7.1 2,135 4.5

Electric Reliability Council of Texas(ERCOT)

1,309 2.1 1,484 2..3

ISO New England, Inc. (ISO‐NE) 2,183 8.7 2,116 7.8

Midwest Independent Transmission System Operator (MISO)

5,300 5.5 8,663 8.0

New York Independent System Operator (NYISO)

3,291 10.7 2,498 7.5

PJM Interconnection, LLC (PJM) 10,454 7.2 13,306 10.5

Southwest Power Pool, Inc. (SPP) 1,385 3.5 1,500 3.3

Source:  Assessment of Demand Response and Advanced Metering, Staff Report, FERC, Nov. 2011  

(c) Saifur Rahman 24

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Potential Peak Load Reduction attained by Demand Response(by region and customer class, 2010)

Source: Based on Survey undertaken for the 2010 Assessment of Demand Response and Advanced Metering report by the Federal Energy Regulatory Commission 

(c) Saifur Rahman 25

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Customer Incentives and ParticipationUtilities often provide incentives enticing customers to join demand response programs.  Some examples: 

Utility Type Description

PG&E Technical Assistance and Technology Incentive(TA&TI)

Up to $125/kW of demand response to assist customers with investment in demand response and energy management technologies; Up to 75% of the demand response project costs 

NYSERDA TA&TI Up to $100/kW Upstate and$200/kW Downstate to offset cost of equipment and technology;  75% of project cost

SDGE TA&TI Up to $300/kW

SCE TA&TI Up to $300/kW  (c) Saifur Rahman 26

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How can Demand Response Improve Acceptance of Renewables into the 

Electric Power Grid?

(c) Saifur Rahman 27

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PJM 13‐Month Wind Generation

28Source: PJM wind power statistics, 2011(c) Saifur Rahman 28

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10700 MW Peak Saving

13700 MW Peak Saving w/ DR

(c) Saifur Rahman 29

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16700 MWPeak Saving22500 MW Peak 

Saving w/ DR

Wind Power Output 34250 MW

(c) Saifur Rahman 30

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How can the Smart Grid Help?

31

Peak load reduction, generator efficiency improvements and DER integration are major benefits of the smart grid

Load control at the customer level can provide significant peak load reductions

How to incentivize the customer?

(c) Saifur Rahman 31

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Smart Grid Definition

• According to United States Department of Energy’s modern grid initiative, an intelligent or a smart grid integrates advanced sensing technologies, control methods and integrated communications into the current electricity grid.

32(c) Saifur Rahman 32

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33

AMRCustomer OutageDetection

AutomatedMeter Reads

Theft IDRemote TFTN

Remote Meter Programming

AMR Capability+

Load Control

Price Signals sent to Customer

New Rate Design

AMI

Smart GridAMI Capability+

Remote detection – sensors everywhere

Central and distributed analysis

Correction of disturbanceson the grid

Optimizes grid assets

Distribution Automation

Leverage data to understandsystem performance better

“Self Healing”

Enable use of renewable resources

Enable electrification of transportation

Hourly RemoteMeter Reads

Customer Voltage Measurement

Source: EnerNex(c) Saifur Rahman

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Power PlantTransmission

DistributionHome

BusinessEnd-use

Appliances

Starting and End Points of a Smart Grid

From Generator to Refrigerator

(c) Saifur Rahman 34

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Electric Power & Communication Infrastructures

Central GeneratingStation

Step‐Up Transformer

DistributionSubstation

ReceivingStation

DistributionSubstation

DistributionSubstation

Commercial

Industrial Commercial

Gas Turbine

RecipEngine

Cogeneration

RecipEngine

Fuel cell

Micro‐turbine

Flywheel

Residential

Photovoltaics

Batteries

Residential Data Concentrator

Control Center

Data network Users

2. Information Infrastructure

1.Power Infrastructure

Source: EPRI 35(c) Saifur Rahman 35

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PG&E Smart Grid VisionToday’s Grid

Source: Andrew Tang, PG&E’s Smart Grid Vision, April 29 2008. Online [Available]: http://www.energy.ca.gov/load_management/documents/2008-04-29_workshop/presentations/6%20%28PG&E%29%20-%20CEC%20SmartGrid%20workshop%20042908%20v1.pdf

Future Grid

(c) Saifur Rahman 36

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Building Blocks of the Smart Grid

© Saifur Rahman

(c) Saifur Rahman 37

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Smart Grid Projects in the United States

www.sgiclearinghouse.org

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References used

1. http://siteresources.worldbank.org/INTENERGY/Resources/PrimeronDemand‐SideManagement.pdf

2. http://www.sidsnet.org/docshare/other/20070110DSMBestpractices.pdf

3. http://en.wikipedia.org/wiki/Demand_response

4. http://pjm.com/markets‐and‐operations/demand‐response.aspx

5. http://www.energyadvantage.com/blog/2010/02/demand‐response‐demand‐side‐management‐what’s‐difference/

6. http://www.pjm.com/markets‐and‐operations/demand‐response/~/media/markets‐ops/rpm/20090406‐dr‐ee‐in‐rpm‐

collateral.ashx

7. http://pjm.com/markets‐and‐operations/demand‐response/~/media/markets‐ops/dsr/dr‐sympoisum‐ii‐proceedings.ashx

8. http://www.ferc.gov/industries/electric/indus‐act/demand‐response.asp

9. http://pjm.com/markets‐and‐operations/demand‐response/~/media/markets‐ops/dsr/2011‐final‐energy‐load‐management‐

and‐economic‐demand‐response‐summary.ashx

10. http://www.energyadvantage.com/blog/2010/02/demand‐response‐demand‐side‐management‐what’s‐difference/

11. http://downloads.lightreading.com/internetevolution/Thomas_Weisel_Demand_Response.pdf

12. http://www.pge.com/mybusiness/energysavingsrebates/demandresponse/tatip/

13. http://www.hks.harvard.edu/fs/whogan/Hogan_Demand_Response_102909.pdf

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40

Thank you

Saifur Rahman

Email: [email protected]

www.saifurrahman.org