Demand Response As a Tool for Demand Side Management and Implementation Challenges

INDIA SMART GRID FORUM July 20, 2012

Vijay Sirse / Chairman and CEO CPvT Energy India Pvt. Ltd
A Smart Grid Solutions Company

(Subsidiary of vTrium Energy, Singapore)

Introduction to CPvT Energy

CPvT Energy (CPvT) is an Energy Management Services Company, a subsidiary of vTrium Energy, Singapore. The Energy Market Authority of Singapore (EMA) awarded CPvT Singapore a Smart Energy Challenge (SEC) grant to enrol customers to implement a 40 MW Distributed Virtual Power Plant (Demand Response System) pilot. From the experience of successful implementation of the Singapore DR Project, CPvT propose to offer the opportunity to Indian Power Sector stake holders (Distribution Utilities or the Power Exchanges) to participate in a Demand Response Program, largely targeted to Commercial and Industrial consumer base.

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DR Definition : CERC Grid Code

Definition (t): Demand response means reduction in electricity usage by end customers from their normal consumption pattern, manually or automatically, in response to high UI charges being incurred by the State due to over-drawl by the State at low frequency, or in response to congestion charges being incurred by the State for creating transmission congestion, or for alleviating a system contingency, for which such consumers could be given a financial incentive or lower tariff

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DR Around the World

DR is a growing global phenomenon and is considered an integral part of energy management by power system authorities. It is now very widely adopted in the USA, Canada and the UK, to help manage grid conditions.

Demand response is a valuable resource for meeting the nations energy needs. By lowering the peak demand for energy, demand response programs reduce the need to construct new, expensive generation units. (FERC NAPDR). Within the worlds largest Power Market (PJM in the USA), DR now accounts for nearly 10% of the capacity needed to manage the potential growth in electricity consumption.

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Demand Response (DR): Concept

DR is a set of actions taken at a site to reduce electric draw from the grid on those occasions when the supply and demand is out of balance or prices are high due to limitations on supply. DR is a very effective means of deployment of Demand Side Resources in the energy market. Customers whose load reduction offers are accepted through CPvT must either reduce load as contracted or face a penalties. Typical Program Characteristics:
Event Time During times of grid-stress leading to high Peak prices Event Duration 30 minutes (min) to 2 hours (max) Annual Participation About 100 hours

The most important benefits of DR as a Demand Side Management are:

o

Lowering of Wholesale Market Price / Short Term Power Purchase Costs

Deferment or avoidance of peaking power plant

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Importance of DR:
Indian Context
Reduce dependence in imported coal/ gas

Save on STPP Cost for Discom and reduce consumer Electricity Bills

Capacity Deferment / Reduce Emissions

Market-wide Financial Benefits: Lower Wholesale Market Prices

Reliability Benefits: Lowers the likelihood & consequences of forced outages and load shedding

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DR Stakeholders
Load Reduction

Bi-lateral Structure

Discom
Curtailment Incentive Regulatory Approval DR Curtailment Signal Participation Incentive

Participating Customers

DR Curtailment Management

INDIA Regulatory Body

Implementation Support

SINGAPORE
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DR Stakeholders
Demand Bidding Market Mechanism
Service contract Scheduling Settlement Performance Monitoring PCs DR Aggregator

MPPs

Trading Cos Bid Clearance Scheduling Settlement

Participating GenCos Exchange

Capacity added /curtailed

Balancing & Ancillary Service Providers Bid and win according to Merit order

Settlement

Dispatch instructions

LDC

Grid

Power Prices: Daily Prices DR Potential : Peak Times

25.00 16.00

IEX Price
14.00 20.00 12.00

PXIL Price

Price (in Rs./KWh)

15.00 IEX Min IEX Max IEX Weighted Avg

Price (in Rs./KWh)

10.00 PXIL Min PXIL Max 6.00 PXIL Weighted Avg 4.00

8.00

10.00

5.00 2.00

0.00
Jan Feb Mar Apr May June July August Sept Oct Nov Dec

0.00 Jan Feb Mar Apr May June July August Sept Oct Nov Dec Months'11 CPvT 2012 Confidential All rights Reserved

Months'11

DR Opportunities Periods
(30 Minutes Slot till March 31, 2012 and 15 Minutes Slots thereafter up-to June 20, 2012)
Slots @ Rs 4.75
PXIL 2009 2010 2011 2012 3297 1938 1840 2722 IEX 4707 1997 1605 242 2009 2010 2011 2012

Slots @ Rs 5.00
PXIL 3166 1817 1704 2515 IEX 4379 1771 1365 140

Slots @ Rs 5.50
PXIL 2009 2010 2011 2012 2865 1496 1135 1943 IEX 3828 1422 737 14

Slots @ Rs 6.00
PXIL IEX 3431

Slots @ Rs 6.50
PXIL IEX 3074

Slots @ Rs 7.00
PXIL IEX 2689

2009
2010 2011

2632

2009
2010 2011

2291

2009
2010 2011

2009

1297
713 1491

1223
384 2

1128
548 1136

996
217 0

924
496 641

786
175 0

2012

2012

2012

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Managed Reduction of assets & processes

DR Notification from CPvT NOC (Actual Site Picture) Turn off elevators 1 to 4

DR Process
Turn Off /Implement global temperature resets

GRID STRESS

PSO Notifies CPVT Control Centre

CPVT Control Centre Notifies Participant

Participant Responds Curtailment Reduces burden on grid Event over

GRID RELIEF

Event called

nWs

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DR Measurement Process
Utility Meter Data Acquisition
Usually for 15-30 min interval

VEE ( Validating, Estimating & Editing) Transfer to CPvT Network Operating Center

Cleaning of meter data by plugging any gaps in data due to transmission or meter reading errors as per prevailing standard VEE practices. This corrects mistakes in data, if any.

With computer-to-computer link using transfer protocol such as SOAP or FTP

Baseline & Performance Computation using Utility Meter Data

CPvT software computes the rolling baseline and individual performance for each site, which is aggregated to compute program baseline and performance

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Challenges: Regulatory Environment

Requires coordination with EE Programmes as DR increases customer awareness of consumption DR potential should be considered in planning/demand forecasting exercises.

Orientated towards supply side.

No Negative Watt option

DRA model does not exist currently not possible for DRAs to bid on behalf of retail customers.
Regulatory push required to make DR mandatory as part of DSM program

Policy

Market Structure

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Challenges: Economic
Limited financial incentive for utilities, aggregators, customers. Reliability and Predictability of DR resource DR as RPO portfolio An accurate assessment of the true financial value of DR related peak reduction is essential to quantify DR benefits:
o o o Reduction in wholesale electricity prices. Avoided of peak power generator Avoided associated T&D capacity

As DR is a tool for long term power system planning, therefore requires proper cost allocation DR programs should be considered in the context of climate change and could contribute towards fulfillment of Renewable Purchase Obligation (RPO) by the Discoms.

CHALLENGES

SOLUTIONS

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Challenges: Technology
Potential challenges related to uncertainty about evolving technology such as new types of metering equipment, metering standards, or communications technology Lack of communication metering infrastructure leading to increased cost of program roll out. Lack of interoperability and open standards No off the shelf solution for a NOC, no specifications E.g. Vendors sell packages for MDM or Market Management but not the 2 together. A market transformation initiative akin to that pursued for EE is needed to allow rapid penetration of smart (price sensitive) control technologies in customer premises that would allow them to see the full benefits of DR program.

CHALLENGES

SOLUTIONS

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Challenges: Design & Awareness

Improved DR program design is the most significant aspect of market penetration of DR.
o Programs must be designed to find a balance between the reward that customers receive and the inconvenience (or cost) that they incur by participating.
Program must be designed to provide reasonable lead time to respond to demand response events with an intent to balance operational needs with customer ability to respond.

Lack of customer awareness and education: Profiling many different customer categories. Client Identification Who can participate? Why should they participate? Time Consuming Energy Audit! Conflict between depts e.g. Finance & Production, Finance & Facility Operators

Programme Design

Customer Enrolment (The Most Challenging Part of DR!!)

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DR Virtual Power Plant (VPP) Benefits

Flattens the load curve Provides all the benefits of peaking power plant; fast to deploy, has wide-area or locallytargeted applications, requires no additional infrastructure, reduces system losses and pollution and helps to reduce dependence on fossil fuel Drives energy efficiency for large power consumers, reducing costs and improving profitability and also helps to improves energy density nationally

Provides capacity to the utility, negating the need to purchase expensive peaking generation capacity on the spot market
Supports ancillary services to help improve grid operation Offsets the costs associated with unforeseen generation shortages Enables deferment in capital spending on T&D infrastructure required to support peak loads, improving investment efficiency

The project will also demonstrate that the incentivized inclusion of the demand side in the energy supply equation will result in tremendous tangible and intangible benefits

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Singapore Actual DR Test

M&V Chart

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Singapore Actual DR Test

M&V Chart

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CONTACTS Vijay Sirse

Chairman & CEO Mobile: +91 98 110 67988 Ms Bridgit Hartland-Johnson Mobile: +91 96 500 13322 Mr. Himanshu Buttan Mobile: +91 98 111 93984

Web: www.cpvtenergy.com / www.vtriumenergy.com

LET US DO MORE WITH LESS ENERGY THANK YOU