Proof that demand response is all grown up now

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We've been talking about next-generation demand response for years under phrases like DR 2.0, Active DR, AutoDR and more. Schneider Electric's Phil Davis makes the case that we've arrived. – Jesse Berst

 

By Phil Davis

 

How demand response evolved from reactive tool to active energy management solution

FERC long has maintained that there is an equivalent demand response (DR) product for most supply-side generation products. After more than a decade of large, formal programs, demand response has become the unofficial language of the smart grid. It has the most robust language of customer engagements, coupled with the best existing mechanism for performance feedback and energy use education.

 

Traditional DR programs have shown equivalency to base, peak and emergency generation with frequency and other ancillary services growing quickly. Last winter, DR became a strong winter performer, so physically DR truly is a 24x7x365 tool.

 

Perhaps the newest evolution of DR is application. Traditionally, DR has been used for wholesale programs at a large scale, and in direct load control programs or some form of demand pricing at the distribution level. The next phase will see DR in the distribution control room as a dispatch tool.

 

The abundant information from smart grid technology coupled with societal demands for renewable energy and extreme energy efficiency means future grids will be “right-sized” rather than over-sized to meet different demand profiles. The most recent profiles of OpenADR support this. Globally, Schneider Electric is participating in pilots that use a combination of storage and DR to meet differing utility needs. What we’re seeing is a potent combination that delivers the lowest cost of energy by removing the need for so much spinning reserve. Very exciting.

 

Common misconceptions about DR and its benefits

Perhaps the biggest misconception is that DR is for large wholesale (ISO) programs only – and that it will fade away as we become more efficient or gain better storage technology. Consider renewables integration: a 2 MW battery can provide regulation support for a 12 MW wind farm, but what happens as the wind dies down? That battery can provide some transition capability, but traditional DR then must come online to maintain electrical services. Another misconception is that cheap natural gas means no more supply worries. As we saw last winter, having gas and delivering it are two entirely different things. Transportation (pipelines) during our brutal winter rose in cost to the extent that DR was employed as a hedge against pricing and delivery interruptions.

The role of Big Data and analytics in demand response

Smart grids bring a wealth of data to utilities – analytics turns that into actionable information.  Rather than sampling, studying and modeling, utilities will KNOW what’s happening on the grid. This allows them to fine tune the grid constantly for greater reliability and lower cost. It also opens the door to agile control districts – the idea that demand can be altered to best fit local grid conditions within fractions of a second, or that outages can be minimized through rapid fault identification and re-routing. DR can aid this process by lightening loads in affected sections. Agile districts might be microgrids, but they also could be virtual resources tied together because of a common electrical characteristic.

                                                     

The key to making smarter demand response decisions is to make big data actionable through visualization and energy management tools. These types of tools integrate millions of data points to drive greater visibility and ultimately better decisions in order to provide more reliable service while improving energy efficiency. For example, EPB, Chattanooga’s municipal utility, is currently deploying Schneider Electric’s Energy Profiler Online (EPO), a cloud-based energy management information system (EMIS), which takes the large volumes of customer usage data – near real-time usage, load and cost information – and turns it into actionable information for customers. The technology allows EPB to make operational changes as demand grows or analyze the data over time to identify potential inefficiencies in energy usage.

 

The next steps in enabling integrated demand response

We have some pretty good technology, but we need progress on the business and regulatory fronts, too. One possibility gaining interest is Transactive Energy, a system for contracting for energy that largely would supplant traditional tariff designs. It’s somewhat similar to the way some wholesale markets now work, but more automated and optimized for millions of retail participants. In turn, that relies on strong open standards, of the sort promoted by the Smart Grid Interoperability Panel. Very important stuff.

 

As distributed energy resources increase and the electricity industry evolves from a traditional value chain to an interconnected business model, utilities will need to embrace – and successfully manage – bi-directional power flows through increased automation and intelligence. Demand response has added a new reality through better metrics, better equipment, faster feedback and a mechanism for wide area coordination. Utilities like Austin Energy and EPB are leading the way, using advanced smart grid technology to help manage growing demands and peak loads, all while providing greener, more reliable power to their end users. This type of integrated demand response is ushering in fully integrated smart grid – from the control center to the customer – with a flow of activity that is seamless with no artificial boundaries, such as meters, to stand in the way of efficiency and progress.

 

Phil Davis is Senior Manager Smart Grid and Demand Response Solutions at Schneider Electric.

 

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