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Demand Response in MISO Markets NASUCA Panel on DR

Demand Response in MISO Markets NASUCA Panel on DR. November 12, 2012. About MISO. MISO is an independent, non-profit organization and is committed to the safe, cost-effective delivery of electric power MISO’s Three Primary Roles: Reliability - keeping the lights on throughout the Midwest

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Demand Response in MISO Markets NASUCA Panel on DR

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  1. Demand Response in MISO Markets NASUCA Panel on DR November 12, 2012

  2. About MISO • MISO is an independent, non-profit organization and is committed to the safe, cost-effective delivery of electric power • MISO’s Three Primary Roles: • Reliability - keeping the lights on throughout the Midwest • Wholesale Market Management - allowing the sale and transfer of wholesale electricity to reduce costs and promote reliability • Regional Transmission Planning - working with all transmission stakeholders to develop the region’s transmission grid in a way that promotes public interest; reliability, and enables lowest-cost delivery of electricity and implementation of public policies

  3. Market Based Demand Response • MISO operates an open wholesale energy market where Market Participants can buy or sell energy in a fair, efficient and non-discriminatory manner • Markets work best when there is vigorous and voluntary participation by both buyers (demand response) and sellers • Demand response can: • reduce the need for new generating capacity • address real-time reliability issues • mitigate peak prices and price volatility • limit supplier market power

  4. Demand Response Participation • MISO’s markets provide opportunities for demand to participate on a comparable basis to supply side resources (generation) • Provides price signals for demand resources to make flexible energy use decisions • Provides for full cost recovery of the flexibility offered by demand resources

  5. MISO Services for Demand Resources • Energy and Ancillary Services Markets • Day ahead Energy • Real time Energy • Ancillary Services Markets • Emergency Procedures • Resource Adequacy • Ancillary Service Markets • Resource Planning

  6. Day-Ahead Energy Market • Participation in Day Ahead Market provides a hedge against real-time congestion • Offer types • Fixed Demand Bid – Loads indicate the amount to be purchased, regardless of price (~85% of market demand on a daily basis) • Price Responsive Demand (PRD) – Loads submit PRD bids, either “physical” or “virtual,” to manage price risk (~15% of market demand on a daily basis) • Demand Response Resources (DRRs) – Treated in all respects like generation; DRRs are evaluated and cleared based on offer components, including start, notification, minimum run times and availability

  7. Real-Time Energy Market • Participation in Real-Time Market provides price signals for supplying real-time energy • Offer types • Price Responsive Demand (PRD) – Load Serving Entities manage load by responding to Real-Time clearing prices • Demand Response Resources (DRRs) – DRRs can be dispatched based on economics, in the same manner as a supply-side resource • Including ability to participate in 5-minute balancing market

  8. Ancillary Services Markets • Enables demand resources to provide Ancillary Services • Spin and Regulation services • Offer types • Demand Response Resources Type I • Capable of supplying a specific quantity of Energy to the market through physical load interruption • Committed in the same manner as a Supply Resource • Demand Responsive Resource Type II • Capable of supplying dispatchable Energy to the market through behind-the-meter generation or controllable load • Can be Committed and Dispatched in the same manner as Generation Resources

  9. Emergency Procedures • Demand Resources during emergency conditions are used to avoid load interruptions during Real-Time generation emergencies • Needed infrequently in MISO to date • Demand Resources provided • 3,000 MW of relief on August, 2006 • 300 to 500 MW in February 2007

  10. Resource Adequacy • Provides a mechanism for Demand Resources to be counted as capacity similar to generation resources by MISO Load • Approximately 9,000 MW of Demand Response in MISO is eligible to count towards capacity by MISO Load • Today most of this 9,000 MW is registered as Emergency Demand Response

  11. Resource Planning • Enables MISO to plan the transmission system for use of demand resources • MISO conducts long-term reliability planning to determine the need for and to coordinate new investment in generation and transmission in each region • MISO, through its MISO Transmission Expansion Planning (MTEP) process, has committed more than $5b for new transmission investment • In MTEP planning studies, demand resources compete against generation or transmission to address internal resource deliverability

  12. Questions?

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