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Technology for a better society 1
Ove S. Grande Senior Research Scientist SINTEF Energy Research
Market Based demand Response Results from Norwegian Research Projects IAE/DSM workshop, Trondheim 18 April, 2012
Technology for a better society 2
Outline
• Introduction
• Marked Based Demand Response – Value of demand side price elasticity
• Examples from Norwegian pilot tests – lessons learned – Load shifting – remote control – Innovative Power contract: "Fixed Price with return option"
§ EcoGrid EU (FP7) Large scale smartgrid demonstration of an advanced market concept
Technology for a better society 3
NorNed
Power Exchange: Nord Pool Common Balancing Market
Ø Nordic system: 91 GW (47 GW hydro)
Ø Central European system: 667 GW
Ø Development towards integration in Europe:
n Market coupling DA (TLC, CWE)
n Implicit auction on all HVDC links
n Integration of balancing markets
Nordic system
Central European system
Technology for a better society 4
Electricity consumption in Norway
• Total 127 TWh (07) – Heating: ca 35 TWh – Large industrials: ca 40 TWh
• Peak load: 23 994 MW
• A large (theoretical) DR potential – Industry ~3 000 MW – Residential and commercial: ~1 700 MW
• Production (99 % Hydro): average 130 TWh/Year 50 TWh variation between wettest and driest year
Technology for a better society
Monopoly - competetion
Kraftleverand ø r Power supplier
Market operator (NordPool)
TSO (Statnett)
Authorities (NVE)
Revenue cap regulation RPM Elspot
Agreements
Monopoly Market
Revenue cap regulation
Sluttbruker Customers
Nettselskap DSO
Network tariff Energy price
Technology for a better society 6
Remote controlled or automatic load reduction
Price dependent load reduction
Demand side participation in market and system operation"
Market phases
Quantity
Price hedging phase
Spot phase
Price
Time
Control phases
Pre-operational phase
Production planning / Bidding Regulating Power
Operational phase
0 2 4 6 8
10 12
Spot trade
Bilateral trade
4 8 12 16 20 24
Option Market for Reserves
Technology for a better society 7
Value of demand side price elasticity
Load
Manual load shifting
Original demand
Automatic load shifting
Price- dependent response
Price
p0
p1
V0 V1
Remote controlledload reduction
Pricedependantload reduction
Market phases
Quantity
Price hedging phase Spot phase
Price
Time
Control phases
Pre-‐operational phase
Productionplanning /Bidding RegulatingPower
Operational phase
02468
1012
Spot trade
Bilateral trade
4 8 12 16 20 24
Option Market for Reserves
Less than100 MW load reduction would have reduced the price from 13 NOK to 1 NOK
Technology for a better society 8
Price and CO2 emision impact
Marg. Cost [€/MWh] (CO2 ~30 €/t)
40
80
Hydro/wind
nuclear Lignite
Coal
Gas b
Gas p
Oil cond
CO2 emission 0,5-1 t/MWh
Consumption peak
Volume (MW)
Technology for a better society 9
Benefit for customers
€/MWh
Δp
Cost reduction for the Responsive customer
Every customer will benefit from the reduced average price
Technology for a better society 10
Present contract types Norway
• Standard Variable Price (SVP) • Spot Price (SP) • Fixed Price (FP)
SVP
SP FP
Technology for a better society 11
Status AMR Norway
• Full roll out of Automated Metering and Control systems (AMS) by the end of 2016
• Functional requirement – Register and store with a sampling frequency of 60 min (optional15 min ) – Disconnect or limit power output – Exchange price information – Prepared for both output and input of energy on customer (prosumer) level
– Standardized interface for communication with external equipment (display) – Connectable to other meter equipment – Secure storage of data in case of voltage interruption – Data security measures
Technology for a better society 12
Market based Demand Response Project (2005-2008) Pilots 1. ”Remotely controlled Load shifting" – peak load reduction
2. ”Fixed Price with Return option” - reduction of energy in shortage periods
3. Automatic Demand Response (ADR)
4. ”Smart house – ToD tariff” – housing cooperative
Technology for a better society 13
Household electricity consump2on in Norway
Space heating
Water heating
Approx 80% of electricity consumption relates to water and space heating. Source: : EU/ REMODECE
Technology for a better society 14
Pilot I “Remotely controlled Load shifting – ToD tariff“ • Test group: 41 household customers
• Network tariff: Time of Day tariff with high price in periods with
expected shortage (+ 0,10 € , Mon-Fri, hour 9-11 and 17-19)
• Energy price - Hourly spot price (free choice of supplier)
• Remote control of water heaters (2-14 kW) via AMR in the defined periods
• ”El-button” reminder
Technology for a better society 15
time
Pilot I Results
Positive response from all customers. No cold water complaints.
Accumulated 600 -1000 MWh/h load reduction in peak hour indicated.
Automatic load reduction in peak load periods gives a stable demand response
Technology for a better society 16
Pilot II Fixed price with return option (FWR)
• Fixed Volume - financial contract combined with spot price settlement
• Objective /characteristics – Give incentives to load reduction in periods with shortage – Retaining the advantages of fixed price contracts with
regard to predictable costs – Reduce the risk for the supplier.
Ø 2500 household customers
Technology for a better society 17
Fixed price volume
Real consumption
time
kWh/h
time
Sale
Fixed price
Price
Elspot
Technology for a better society 18
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4
[Quarter]
[kWh/quarter]
FWRSpotSVP
+10,4%
-24,5%
+7,7%
Demand response from FWR customers compared to alternative contracts
Technology for a better society
EcoGrid EU (FP7 Energy – 2010-2) 2011-15, 20, 6 M€ Ø Main objectives: § To demonstrate operation of
a power system with more than 50 % renewable sources
§ To implement ICT systems and innovative market solutions - offering TSOs additional and more efficient balancing services
§ To enhance small consumer and local producers to participate in the power market through real-time operation, energy storage and savings
19
Technology for a better society
The Scope of a Real-time Market
Time scale
The EcoGrid Real-time Market will be an integrated part of the current power markets and supports the need of direct control options on a very short time scale
Intra-day (Elbas) Regulating power market
AGC/LFC/ Frequency-controlled reserves Inertia
Quantity
Days Hours Minutes Seconds Now
Volatility
Direct control
Market-based operation
EcoGrid Real-time
Market
20
Technology for a better society
EcoGrid EU market concept Test period autumn 2012 – spring 2014
Test site: Bornholm Operated by the Danish DSO Østkraft Demonstration in a real system with > 50 % RES Part of the Nordic energy market
Technology for a better society 22
EcoGrid EU Planned test groups
Control Group 2-300
FC
PV
EV
PV
Smart
Businesses ~100
Manual
control user 4-500
IBM/PowerMatcher Users ~700
Siemens Users ~500
??
Technology for a better society 23
Summing up v Demand response can effectively be integrated into the power market.
v Full AMR-rollout will empower also the smaller customers to profit from
adaptation to different market situation.
v Demand response have significant value – relative small decline in demand can contribute to substantial reductions in price in shortage situations.
v Temporary reduction in domestic space heating and load shifting of water heaters are the most convenient demand response objects in Norway, and the accumulated potential is large.
v Demand response closer to operation necessary to cope with future challenges related to high share of intermittent production as demonstrated the EcoGrid EU project on Bornholm (Denmark).
v PARADOX: Success with Demand Response will reduce the price differences and thereby the potential payback for necessary investments .
Ø Additional incentive mechanisms, e.g. ToD tariffs, needs to be considered in order to achieve wanted socio-economic benefits!
Technology for a better society 24
Thank you for your attention!