A California-based project has reached an important milestone towards its ambitious goal of a demand response (DR) infrastructure that is "10 times more functional at 1/10th the cost." If successful, it could transform DR in California. And, eventually, around the country.

The urgent need for DR

The 2006 summer heat wave pushed many utilities and system operators to the breaking point. The California Independent System Operator (CAISO) declared two Stage 1 and two Stage 2 alerts in July, signaling a precariously low reserve margin. Similar episodes were repeated across the country.

When operators run out of generation, the alternatives are rolling blackouts – which nobody likes – or getting customers to drop discretionary loads. The practice of giving financial incentives to drop load during peak times is known as demand response or DR.

The problems with existing DR systems

Today's DR systems have many limitations. Operators must balance load in real-time. They cannot tolerate any delays getting a signal out, confirmed, and acted upon. Their DR systems must be fast, error-free and automatic – characteristics lacking in most current versions.

Currently, the processes to manage DR – from upfront customer enrollment to real-time communications to the final financial settlements – have been cumbersome. Additionally, the signal from the grid operator must go through multiple channels and multiple hands... some automated. As a result, today's voluntary load shedding programs are error-prone and time-consuming. Operators often resort to involuntary load shedding simply because they can't tolerate the lag time in their voluntary DR programs.

DRBizNet to the rescue

A new approach addresses these limitations while also promising to lower costs and expand DR to more players. Demand Response Business Network (DRBizNet) is an "enabling technology" that allows real-time collaboration among multiple stakeholders. Typically, those stakeholders include the grid operator, utilities, the participating customers, and various other agents. The research project was funded by the California Energy Commission's Public Interest Energy Research program.

The new technology can instantaneously transmit signals from a grid operator to hundreds, thousands, or even millions of participating customers. The load they shed is immediately registered and aggregated. The grid operator receives quick notification of the amount of reduction available, allowing it to use voluntary DR rather than involuntary rolling blackouts.

A milestone demonstration

DRBizNet has an ambitious goal: to make DR 100 times better by reducing costs by a factor of 10 while increasing speed and functionality by a similar amount. On August 11, 2006, the project hit an important milestone, performing a successful field demonstration. Participants included CAISO, Pacific Gas & Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, DR service provider Infotility, and representative commercial and residential customers.

"The most innovative aspect is the communications model," says Steve De Backer, Senior Program Manager of Pacific Gas & Electric Company. "That model allows parties to communicate demand response information in near real-time using advanced computer technologies." Additionally, DRBizNet’s standardized protocols offer a better way for utilities and grid operators to manage internal business processes. Examples include customer enrollment, meter management, load shedding and settlement processing.

Until recently, DR technology has been constructed on a piecemeal, one-off basis, with each utility doing things a little differently. At long last, common approaches are emerging. DRBizNet is one of the most advanced and most promising. “Moving to fast, automated end-to-end solutions with standardized protocols is the only way to go,” confirms Perry Sioshansi, president of Menlo Energy Economics and part of the project team.

California's energy problems have often come earlier, longer and larger than other regions. With DRBizNet, the state is early to an important solution – a shared, standardized, inexpensive infrastructure for implementing robust demand response programs.

   DRBizNet Web site

   Email lead consultant Ali Vojdani