White House panel on DR, efficiency features key leadership

Smart Grid Today
February 27, 2020

FERC Chairman Jon Wellinghoff told a White House-sponsored event yesterday that DR and energy efficiency are not separate subjects and go hand in hand.  Ever since air conditioning started to drive peaks some 50 years ago -- a trend that is continuing to grow, the capacity factor of power plants has gone down, he added.

It is now at about 50% and in the past it was nearly as high as 70%, Wellinghoff said at the White House Council on Environmental Quality's event titled "GreenGov Dialogue on Demand Response."

Generation has to ramp up and ramp down constantly to match demand or else the grid gets unbalanced and that can lead to reliability issues, said Wellinghoff.  Flattening out the demand curve with DR so that generators can run at a steadier pace would make them more efficient.

"Not necessarily having to do this only at those peak one or two days in the summer, but doing it 24 hours a day, seven days a week, we ultimately could run our system much more efficiently -- and by running it much more efficiently, we can save money," Wellinghoff said.

Organized markets have helped give opportunities for customers to take part in them with DR, said Wellinghoff.

Capacity markets create the historic kind of "reliability DR," which has grown significantly in those markets with them.  PJM's last auction cleared 14,822 MWs for 2015/2016 and some 96% of all the payments to DR from the RTO were in that market, said its CEO Terry Boston at the event.

"Having capacity is what's made all the difference in terms of demand response having a forward-looking revenue stream," said Boston.  "That's made a world of difference in the PJM market."

PJM implemented Order 745 in time for last summer and that let the RTO dispatch DR in its energy market -- that regularly saw 20% swings up and down in how much was needed to balance the grid.

Order 745's pay-for-performance on frequency-response mandate and a pilot that PJM ran proved DR can have a 50 millisecond response time, which is faster than supply resources, Boston noted.

The next big step in DR that PJM wants to see is "price responsive demand," which it already has rules in place to mesh the retail product with its wholesale market.  But getting the wholesale price signals to retail consumers is needed for that to really take off and Boston implored the federal government to work with its state counterparts to make that happen.
         
QUOTABLE: A smart grid with dumb prices is not going to get there. -- PJM CEO Terry Boston
 
One easy way power consumers large and small can take part in DR is to pre-cool or pre-heat their buildings before the peaks hit.

Boston cited Drexel University in downtown Philadelphia for doing that with its library.  The books actually help hold in the temperatures and release them more slowly over the day, he added.
The same principles could work on federal buildings that are full of paper, he added.

Before he came to Washington to start work as FERC commissioner, Wellinghoff was on a pilot program for his Las Vegas home where he did the same thing as Drexel University's library, he said.  One of the biggest ways to get customers interested in DR is as simple as showing them the savings that are possible.

Energy use is most often a secondary concern for EnerNOC's large C&I and institutional customers, so much so that when it first started in the last decade most customers only thought about power when they paid the bill, its CEO Tim Healy said at the event.

EnerNOC can foot the bill for the advanced metering needed to collect the data that it uses to craft a plan for demand cuts that will not be disruptive to business-as-usual, said Healy.

"The demand response industry is now pretty sophisticated and demand response providers can bring a whole menu of options to customers that will fit every type of customer's needs," he added.
 
DR can go beyond price
 
"DR is not just about price signals," Dan Delurey, executive director of the Association for Demand Response & Smart Grid (ADS), said at the event.  "Now you are seeing information-based DR," that he described as firms using data analytics to provide information that helps people in homes and businesses use energy differently.

Delurey went on to describe DR as:

• Helping justify the cost of infrastructure: Most of the major deployment plans that have been approved by state commissions include DR as part of the justification of the business case.  DR provides a new revenue stream that helps justify the cost of what you're putting in there.
• Not just about peak demand: DR provides customers with tools and information that let them become energy efficient "every moment of every hour of every day."
• The key to getting more intermittent and variable renewable generation sources on the grid.
• The process by which electric vehicles become a resource to the grid.
• The process by which storage becomes a resource to the grid.
• Not just about wholesale: "We have heard it talked about in the retail environment, where utilities that are not in open structured markets to offer DR."
• Helping in system management and restoration: "I haven't seen any stats from the latest episode in the Northeast, but I know several years ago when there was a major blackout in the state of New York, NYSERDA reported that because they had some new things connected with DR-type technologies, they were able to restore power a full day earlier than otherwise."
• Not just about smart meters: "It is all sorts of other things, both inside the dwelling or premise and inside the utility."
• Not going to stay static: "The electricity industry is now a high-tech industry and there's no turning back from that."

Efficiency goes 2.0
 
"In the beginning, there was energy efficiency, and it was good -- and it prospered," Delurey said, raising a chuckle from attendees.  "But then, along came new technologies and other processes and suddenly we are confronted with 'efficiency 2.0,' which I would submit to you is really DR.

"We're now talking about dynamic efficiency, 'dispatchable' efficiency, controllable energy efficiency and, importantly, measurable energy efficiency.  One of the challenges for energy efficiency all these years has been measuring it without the right kind of meters or other technologies out there.

"And certainly it is hard to manage what you cannot measure." Also, with demand response, one starts appropriately with the cost of the KWH that is saved based on the time of day "because they are not all equal to produce."

When people talk about "efficiency 2.0," or "DR 2.0," including more machine-to-machine communication, more automated DR or "utilities 2.0," Delurey said, "I think the '0' isn't necessarily a number but it stands for 'optimization'.  It is about having all the information, all the control, all the time to always make the best decision."

Several minutes of yesterday's discussion focused on limiting use of the term "DR." It was reminiscent of a fall 2010 industry conference discussion where executives said "DR" by any other name would sound better (SGT, 2010-Sep-16).
 
EDF targets big buildings
 
A DR pilot that the Environmental Defense Fund (EDF) is undertaking will work to "reach out to large commercial building owners and operators and sign them up," Elgie Holstein, senior director for strategic planning at EDF, said as a member of the panel.

The pilot actively measures participants' "use of electricity, the fuels they use, the weather and demand issues -- all the data sets that go into the kinds of profiles that can tell you what's working and what's not working for the environment in particular," he added.

The US Green Building Council, a non-profit organization dedicated to sustainable building design and construction, "has hung a carrot out there for its many followers in the form of a pilot credit for demand response, and we're setting out to demonstrate the value of that credit," Holstein said.

EDF's pilot is "starting with five buildings in Southern California and tomorrow, we are starting the rollout of a marketing effort to USGBC's portfolio of Leed-certified and registered buildings and Southern California Edison service territory," he added.  The initial aim will be about 400 large buildings.  "USUBC has a total of about 1,400 buildings in the service territory," Holstein said.

EDF hopes to produce "real world information about how all of these factors come together with demand response in some of the newest and best buildings, and working with them to demonstrate what the environmental outcomes are of different approaches to demand response," he added.
 
Healy describes growth           
 
Boston-based DR provider EnerNOC now has contracts "across the globe," with operations in Australia, New Zealand, Canada and the UK, CEO Healy said as a member of the panel.

"Frankly, when we started out, we did not know what demand response was." he added.  "We knew we wanted to help commercial and industrialand institutional end-users of electricity try to manage their consumption in a data-driven fashion."

The founders of EnerNOC were shocked to find that colleges and hospitals with which they were familiar were not using Oracle or IBM systems to manage the expense of power -- "literally tens of millions of dollars of expense," he said.

"Fast forward to where we are today: 700 employees, 8300+ MWs of demand response, 27,000 watts of peak load under management, a billion points of energy data flowing into our NOC on a month-to-month basis," Healy said.  "And I think we are just scratching the surface and getting going."
 
Green Button plugged
 
The White House did not conduct wide press outreach for the event, which plugged its Green Button initiative.  That initiative, which has come under fire recently for being cumbersome to use and for not crunching enough data (SGT, Nov-16), is planned to mature -- from putting personal energy use data into customers' hands, to a tool that, with customer consent, can ship that information to third parties like energy auditors or solar panel installers (SGT, May-11).

© 2013 Modern Markets Intelligence Inc.  IMPORTANT: This article was reproduced from the February 27, 2020 issue of Smart Grid Today with the limited permission of the owner.  To view the full story on Smart Grid Today’s website, please visit http://www.smartgridtoday.com/public/White_House_panel_on_DR_efficiencyltbrgt_features_key_leadership.cfm.