Smart Grid: An Introduction to Demand Response

Bob Furry, General Manager & Vice President for EPM Commercial Operations, Ventyx gave a comprehensive presentation titled "Smart Grid: An Introduction to Demand Response:

Demand response is defined as changes in electric usage by demand-side resources from their normal consumption patterns in response to:

• changes in the price of electricity over time
• incentive payments designed to induce lower electricity use at times of high wholesale market prices
• system reliability issues

Bob talked about demand response applications as both price-based and incentive-based in terms of timeline: Month-ahead, day-ahead, and day-of, or real-time. Price-based demand response include time-of-use rates (month-ahead), day-ahead hourly pricing (real time pricing, or RTP), real-time hourly pricing (real time pricing, or RTP/CPP (day of). Incentive-based includes capacity/ancillary services programs (month ahead), demand bidding/buyback (day ahead), interruptible programs (day of), and direct load control (real-time). These are both listed in time scales, from months-ahead operational planning, day-ahead economic scheduling, and day-of economic dispatch.

Demand response pricing can achieve four times (4X) load reduction with full participation, and 3x with achievable, partial participation.

Demand response pricing offers many benefits:

• Economic
  • connect end customer to wholesale markets
  • more efficient energy costs
  • better use of existing infrastructure
  • deferment of new infrastructure (fuels, transmission, distribution, transformation, generation)
• Environmental
  • emission reduction
  • more efficient of ufuel
  • reduced impact on new construction
• Other
  • customer satisfaction
  • new product and services

For utilities, the benefits of demand response are numerous:

• avoid or delay power plant investment costs
• improve system performance and rel liability (reduce losses, load relief)
• shape demand to match supply
• provide load relief on distribution networks
• reduce carbon emissions
• seamless of distributed generation and renewable resources

Demand side programs are the foundation of virtual power plants. From direct load control (programmable thermostats, HVAC control, water heaters, pool pumps, home energy management systems) to pricing programs (peak time rebates, time of use, real time, critical and variable peak pricing), to distributed resources (diesel generation, wind & solar, electric cars, home batteries, large batter storage).