Demand Response Opportunities in PJM’s Markets - epa.gov · Demand Response Opportunities in...
Transcript of Demand Response Opportunities in PJM’s Markets - epa.gov · Demand Response Opportunities in...
PJM©2010 www.pjm.com
Demand Response Opportunities in PJM’s Markets EPA Tech Forum Webinar
April 28, 2011
Paul M. Sotkiewicz, Ph.D.
Chief Economist, Markets
PJM Interconnection, LLC
PJM©2010 2
PJM Overview
KEY STATISTICS
PJM member companies 600+
Millions of people served 51
Peak load in megawatts 144,644
MWs of generating capacity 167,367 KMs
of Transmission lines 90,520
GWh of annual energy 729,000
Generation sources 1,310
Square miles of territory 164,260
Area served 13 states + DC
Internal/external tie lines 250
26% of generation in Eastern Interconnection
23% of load in Eastern Interconnection
19% of transmission assets in Eastern Interconnection
19% of U.S. GDP produced in PJM
6,038
substations
PJM©2010 3
What is Demand Response?
• Customer ability to manage
total electricity bill
– Reducing or shifting consumption
away from high price periods to
low price periods
• In a manner similar to the
gasoline example
– Committing to reductions during
peak to maintain reliability in
exchange for a payment that
reduces the total electricity bill
• Similar to reducing recurring
expenses for “infrastructure needs”
such as with homes and cars
www.pjm.com
PJM©2010 4
From a PJM operational perspective it is:
• End-use customer ability to change consumption
in response to wholesale energy market prices
• End-use customer ability to reduce consumption
to meet system generation capacity adequacy
needs during an emergency
What is Demand Response?
www.pjm.com
For utilities or load serving entities it is:
• End-use customer’s ability to shift consumption to
lower priced periods to reduce high price purchases
or peaking generation
• End-use customer’s ability to reduce consumption at
peak to reduce the need for new generating capacity
• other end-use customers can also benefit from these
actions
PJM©2010 5
Demand Response Opportunities in PJM
• PJM RPM Capacity Market
– End-use customers commit to reduce
consumption during emergencies at
extreme system peaks to maintain
reliability
– End-use customers receive payment
for making this commitment
– When called, reductions are
mandatory
www.pjm.com
• PJM Energy Market
– End-use customers reduce
consumption in response to wholesale
market prices
– Reductions are compensated at the
prevailing wholesale market price less
the retail rate
– Participation is voluntary in that there
is no requirement that reductions in
consumption take place
PJM©2010 6
$0
$50
$100
$150
$200
$250
$300
$350
HR1HR2
HR3HR4
HR5HR6
HR7HR8
HR9HR10
HR11HR12
HR13HR14
HR15HR16
HR17HR18
HR19HR20
HR21HR22
HR23HR24
Wholesale Price (Hourly LMP)
Incentives to Respond to Wholesale Prices
in the Energy Market
www.pjm.com
G&T part
of Retail
Rate
An End-Use-Customer
reduce consumption when
wholesale prices are high
PJM©2010 7
PJM DSR Registrations
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Mar
-06
Apr
-06
May
-06
Jun-
06Ju
l-06
Aug
-06
Sep-
06O
ct-0
6N
ov-0
6D
ec-0
6Ja
n-07
Feb-
07M
ar-0
7A
pr-0
7M
ay-0
7Ju
n-07
Jul-0
7A
ug-0
7Se
p-07
Oct
-07
Nov
-07
Dec
-07
Jan-
08Fe
b-08
Mar
-08
Apr
-08
May
-08
Jun-
08Ju
l-08
Aug
-08
Sep-
08O
ct-0
8N
ov-0
8D
ec-0
8Ja
n-09
Feb-
09M
ar-0
9A
pr-0
9M
ay-0
9Ju
n-09
Jul-0
9A
ug-0
9Se
p-09
Oct
-09
Nov
-09
Dec
-09
Jan-
10Fe
b-10
Mar
-10
Apr
-10
May
-10
Jun-
10Ju
l-10
Aug
-10
Sep-
10O
ct-1
0N
ov-1
0D
ec-1
0Ja
n-11
Feb-
11M
ar-1
1
MW
Total Registered MWs in PJM's Economic Demand Response
*Data as of the first day of each month.
PJM©2010 8
PJM DSR Activity
www.pjm.com
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000Jan-0
6F
eb
-06
Mar-
06
Ap
r-06
May-0
6Jun-0
6Jul-06
Aug
-06
Sep
-06
Oct-
06
No
v-0
6D
ec-0
6Jan-0
7F
eb
-07
Mar-
07
Ap
r-07
May-0
7Jun-0
7Jul-07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7D
ec-0
7Jan-0
8F
eb
-08
Mar-
08
Ap
r-08
May-0
8Jun-0
8Jul-08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8D
ec-0
8Jan-0
9F
eb
-09
Mar-
09
Ap
r-09
May-0
9Jun-0
9Jul-09
Aug
-09
Sep
-09
Oct-
09
No
v-0
9D
ec-0
9Jan-1
0F
eb
-10
Mar-
10
Ap
r-10
May-1
0Jun-1
0Jul-10
Aug
-10
Sep
-10
Oct-
10
No
v-1
0D
ec-1
0Jan-1
1
MW
H
Do
llars
PJM Economic Demand Response Activity
Total Net CSP Credits Total Load Reductions
*Data for last few months are subject to signif icant change due to the settlement window.
PJM©2010 9
Offers of Demand-Side Resources as
Capacity in PJM by Delivery Year
www.pjm.com
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Energy Efficiency
RPM and FRR DR
Interruptible Load for Reliability
Active Load Management
Prior to RPM
Implementation RPM Implemented
PJM©2010 10
PJM Demand Side Response Estimated Revenue
*Capacity revenue prior RPM implementation on 6/1/07 estimated based on average daily ALM capacity credits and weighted average daily
PJM capacity market clearing price.
-$50,000,000
$50,000,000
$150,000,000
$250,000,000
$350,000,000
$450,000,000
$550,000,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 as of 3/08/2011
Economic Energy IncentivesEconomic EnergyEmergency EnergySynchronized ReserveCapacity*
PJM©2010 11
Demand Response Opportunities in PJM
• PJM Regulation Market
– End-use customers commit to
follow PJM regulation and
frequency response signal
– End-use customers receive
payment for this commitment
– To date there has not been any
demand response in regulation
www.pjm.com
• PJM Synchronized Reserve
Markets
– As Synchronized Reserves end-
use customers commit to reduce
load in response to a contingency
– End-use customers receive a
payment for this commitment
– If contingency occurs and PJM
asks for reserve, reductions are
mandatory
PJM©2010 12
DSR as Synchronized Reserve
www.pjm.com
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
Aug
-06
Sep
-06
Oct-
06
No
v-0
6D
ec-0
6Jan-0
7F
eb
-07
Mar-
07
Ap
r-07
May-0
7Jun-0
7Jul-07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7D
ec-0
7Jan-0
8F
eb
-08
Mar-
08
Ap
r-08
May-0
8Jun-0
8Jul-08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8D
ec-0
8Jan-0
9F
eb
-09
Mar-
09
Ap
r-09
May-0
9Jun-0
9Jul-09
Aug
-09
Sep
-09
Oct-
09
No
v-0
9D
ec-0
9Jan-1
0F
eb
-10
Mar-
10
Ap
r-10
May-1
0Jun-1
0Jul-10
Aug
-10
Sep
-10
Oct-
10
No
v-1
0D
ec-1
0Jan-1
1F
eb
-11
MW
H C
leare
d
Do
llars
DSR Participation in PJM Synchronized Reserve Markets
Total Payments MWh Cleared
PJM©2010 13
CO2 Emissions Rates of Marginal Units
Average CO2 Emissions Rates
www.pjm.com
• CO2 Emissions Rates of Marginal Units - PJM has analyzed the CO2 emissions
rate information from the Generation Attribute Tracking System (GATS), which is
administered by PJM Environmental Information Services (PJM EIS), for the
specific marginal units for each five minute interval from January 2005 through
December 2010. The five-minute marginal data was aggregated into hourly blocks
and then sorted into on-peak and off-peak time periods and ultimately averaged for
each month. The on-peak period is all non-holiday weekdays from 7 a.m. until 11
pm and the off-peak is comprised of all other hours. The annual numbers are also
provided.
• Average CO2 Emissions Rates - The average CO2 emissions rate is calculated
with the CO2 emissions rate information from GATS. Each unit’s monthly
generation numbers are coupled with the CO2 rate to determine the total monthly
emissions. The total CO2 emissions values for all units are summed across the
PJM region and divided by the total generation in the region to determine the
average CO2 emission rate in PJM for that month. The annual numbers are also
provided.
PJM©2010 14
CO2 Emissions Rates of Marginal Units
Average CO2 Emissions Rates
www.pjm.com
PJM©2010 15
CO2 Emissions Rates of Marginal Units
Average CO2 Emissions Rates
www.pjm.com
PJM©2010 16
Informational Notice
PJM Interconnection, L.L.C. (“PJM) expressly disclaims any obligation to correct or update information
pertaining to the marginal and average CO2 rates (“information”) and offers no warranty of any kind, whether
express or implied, arising from or relating to this information. PJM does not intend for entities accessing this
information to utilize it for any form of reporting or compliance purposes, and such information is provided for
informational purposes only. Any use of the information contained herein is at entities own risk. In no event
shall PJM be liable for any damages of any kind, including, but not limited to, direct, indirect, general, special,
incidental or consequential damages arising out of any use of the information contained herein.
www.pjm.com