Aggregator based implementation of demand response programs
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Aggregator-based Implementation of Demand Response Programs. Kenneth D. Schisler, Senior Director, Regulatory Affairs Bradley J. Davids, Senior Director, Utility Solutions October 16, 2007. Agenda. Introduction to EnerNOC

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Aggregator based implementation of demand response programs

Aggregator-based Implementation of Demand Response Programs

Kenneth D. Schisler, Senior Director, Regulatory Affairs Bradley J. Davids, Senior Director, Utility Solutions

October 16, 2007


Agenda

Agenda

  • Introduction to EnerNOC

  • Demand Response from the Commercial & Industrial Sector: Experience and Perspectives

  • Demand Response Opportunities in Colorado


Aggregator based implementation of demand response programs

Founded in 2001, EnerNOC is the premier demand response provider focused on the commercial, institutional, and industrial market in North America.

About EnerNOC

Resource reliability – Unparalleled track record, with 880+ MW of demand response capacity under contract; almost 2000 facility sites under management; hundreds of DR events deployed to date – we guarantee performance to our utility customers

Turnkey solution – Full service, “end-to-end” offering – auditing, education, engineering, permitting, financing, metering, enrollment, installation, data and payment reconciliation, maintenance – we remove complexity and increase end-user participation

Advanced technology – 24/7/365 metering and web-based monitoring and control through open architecture technology that provides near real-time visibility into performance and availability of DR assets

Industry-leading customer service – Deep experience in energy management – skilled sales and operations team that thoroughly understands the needs of commercial and industrial customers

Financially stable – Strong balance sheet, publicly traded company on NASDAQ (ENOC)


Ener gy n etwork o perations c enter

Energy Network Operations Center

Our Network Operations Center (NOC) features fully automated demand response capabilities to ensure that curtailment happens quickly, efficiently and consistently for both the utility and the customer.

  • The NOC automatically initiates customized demand response protocols at customer sites, so that load reductions can occur within seconds after an event is called.

  • EnerNOC captures and reports customer meter data in 1-, 5-, 15-, or 60-minute intervals to utilities and grid operators, providing real-time and direct visibility into demand response performance.

  • The NOC’s automated capabilities make it easy for end-use customers to respond to market signals.

The NOC monitors customer event performance data in real-time, and automatically identifies and targets underperforming sites to ensure maximized end-user performance.

Upon event conclusion, the NOC notifies participating customers and automatically restores normal operations at customer sites.

The NOC’s sophisticated measurement and verification services ensure high quality performance data after an event.


Recent enernoc utility contracts

Recent EnerNOC utility contracts

  • Southern California Edison

    • 160 MW, 5 year contract*

  • Public Service Company of New Mexico

    • 30 MW, 10 year contract

  • Pacific Gas & Electric Company

    • 40 MW, 5 year contract

  • Tampa Electric Company

    • 25 MW, 4 year contract

  • Tennessee Valley Authority

    • Pilot program (summer 2007)

* pending regulatory approval


Agenda1

Agenda

  • Introduction to EnerNOC

  • Demand Response from the Commercial & Industrial Sector: Experience and Perspectives

  • Demand Response Opportunities in Colorado


Commercial industrial demand response strategies

Commercial & industrial demand response strategies

Curtailment and Load ManagementTemperature set-points, air handlers, lighting, signage, pumps, process loads, refrigeration, motors, elevators, production scheduling

Self GenerationEmergency/backup generators, peaking and continuous-duty distributed generation, UPS systems


Examples of resource providers

Examples of “resource providers”

Commercial Office and High Tech

Education

Food Sales and Storage

Government

Healthcare

Light Industrial

Lodging and Resorts

National accounts are increasingly “expecting” demand response programs as part of utility offerings, based on experiences in active DR markets

8


Aggregator based implementation of demand response programs

Demand response from customer perspectiveUniversity provider combines generation with load curtailment to cut demand by more than 1.7 MW.

Voluntary Extension7:15 PM

Notification 1:00 PM

Event Start 1:30 PM

Event End 6:00 PM

Baseline

Meter Demand

Generator Output

Performance: 1,727 kW

Commitment: 1,450 kW

Load Curtailment

kW

  • Provider Summary

  • Commitment: 1,450 kW

  • Performance: 1,727 kW


Typical site installation

Relay Control Module and 24V Power Source

(Outputs to the transfer switch and lighting controls)

iLon Gateway/Meter

UPS

Typical site installation

EnerNOC Site Server (typically installed next to the transfer switch)


Demand response results from grid perspective

Demand response results from grid perspective

Total ISO New England Demand Response Performance, August 2, 2006


Firm demand response can have a material impact on system peak demand

“Firm” demand response can have a material impact on system peak demand

Case Study: Connecticut

  • ~7,500 MW peak

  • 613 MW of dispatchable (30-minute notice) demand response currently – 8.2% of peak

  • Firm DR capacity is projected to soon reach ~10% of peak demand

Connecticut Load Concentrations

“Today’s peak record would have been hundreds of megawatts higher if it were not for ISO New England’s demand response programs . . .”

ISO-NE, August 2, 2006


Aggregator based demand response programs the functional equivalent of a peaking power plant

Aggregator-based demand response programs: the “functional equivalent” of a peaking power plant

Like a peaking plant . . .

  • Output can be measured and verified in near real-time

  • Capacity can be dispatched by utility control room and brought on-line in 10 to 15 minutes (or less) – qualifies as “synchronized reserves” in PJM

  • Can be used to balance intermittent resources, such as wind

  • Assets can perform for several hours, if needed

  • One supply contract from utility – can include penalties for non-performance


Advantages of demand response programs vs traditional peaking power resources

Advantages of demand response programs vs. traditional peaking power resources

  • DR capacity can be “built” very quickly(6 – 12 months); 100+ MW in 60 daysfor ISO-NE in 2005

  • Capacity can be precisely targeted at areas of highest system need (for example, to defer distribution system upgrades)

  • Almost always less costly than building anew peaking plant – and doesn’t require addedT&D infrastructure

  • Load curtailment resources are emissions-free

  • No “NIMBY” siting issues

  • Reliable (no “forced outage” risk)

  • Long-term contracts are not required – can be expanded incrementally and locationally if needed

  • Performance tends to increase (as well as rated capacity) in conjunction with system peaks

  • Reduces costs for customers; improves customer satisfaction


A few caveats

A few caveats . . .

  • Annual availability has limits – typical program design targets most critical 50 to 100 hours per year

  • Depending on portfolio mix, performance may be limited during shoulder months and off-peak hours

  • Output can vary within a range of “rated output” – typically +/-15%, due to variability of loads controlled and baseline calculation methodology

  • Total capacity is limited to approximately 10% of overall system peak


Agenda2

Agenda

  • Introduction to EnerNOC

  • Demand Response from the Commercial & Industrial Sector: Experience and Perspectives

  • Demand Response Opportunities in Colorado


Aggregator based implementation of demand response programs

Why demand response?Demand response is a cost-effective and reliable way to meet the electric demand peak, which occurs for very few hours per year. The alternative is to build generation and transmission capacity that is unused 99% of the time.

~10% of infrastructure is designed to meet peak demand that occurs during 1% of the year


Typical load duration curve

Typical load duration curve


The challenge bridging utility resource needs with end user realities

The challenge: bridging utility resource needs with end-user realities

Commercial & industrial

end-users are:

Much more concerned about running their business than controlling energy costs

Inadequately staffed to focus on energy-related activities

Uncertain about their ability to reduce load without impacting business operations

Not interested in complex, inflexible contract terms

Reluctant to accept penalties for non-performance

Utility needs:

Resources that are absolutely dependable – in amount, location, duration, ramp-up time

Resources that can relieve constrained zones quickly, and are flexible in scale

Resources that can be monitored in near real time, and are verifiable to regulators

Resources that are cost-effective and environmentally “clean”

Resource providers that can financially guarantee performance


Load aggregation provides risk management to utilities and end use customers

Load aggregation provides risk management to utilities and end-use customers

Customer 1

Customer 2

Customer 3

Customer 4

Demand Response Aggregator

Customer 5

Customer 6

Customer 7

Utility

Customer 8

Customer 9

Customer 10

Customer 11

Customer 12

Customer 13

Customer 14

Customer 15

Customer X

0% RISK

100% RISK

0% RISK


Typical time of day distribution of top 100 hours

Typical time of day distribution of top 100 hours

Possible program timeframe: 10 am to 7 pm


Typical seasonal distribution of top 100 hours

Typical seasonal distribution of top 100 hours


Dr program design a balancing act

Low

High

Customer Incentives

Year Round

Limited Months

Program Period

Curtailment Only

Curtailment/Generation

Critical Hours

Allowable DR Measures

24/7

Event Window

Inhibit

DR program design . . . a balancing act

Each program design element needs to be carefully chosen to balance system needs with the need to stimulate customer program participation.

Range of Design Choices

Stimulate

100+ hours/year

Availability

<50 hours/year

>30 min

Instant

Response Notification


Questions

Questions?

Ken SchlislerSenior Director

[email protected]

(410) 745-8104

Brad DavidsSenior Director

[email protected]

(303) 385-0325

EnerNOC, Inc.

75 Federal St. Suite 300

Boston, MA 02110


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