PJM©2015

DER Participation in the PJM Wholesale Power Markets

Mid-Atlantic Renewable Energy Association

Susan CovinoSenior Consultant, Emerging MarketsMarch 31, 2015

PJM©20152

PJM as Part of the Eastern Interconnection

KEY STATISTICS

Member companies 900+

Millions of people served 61

Peak load in megawatts 165,492

MWs of generating capacity 183,604

Miles of transmission lines 62,556

2013 GWh of annual energy 791,089

Generation sources 1,376

Square miles of territory 243,417

States served 13 + DC

KEY STATISTICS

Member companies 900+

Millions of people served 61

Peak load in megawatts 165,492

MWs of generating capacity 183,604

Miles of transmission lines 62,556

2013 GWh of annual energy 791,089

Generation sources 1,376

Square miles of territory 243,417

States served 13 + DC21% of U.S. GDP produced in PJM

As of 4/1/2014

PJM©20153

PJM's PrioritiesReliability, Market Operations and Regional Planning

PJM©20154

Current Demand Response Participation

www.pjm.com

• DR Capacity – 2017/2018 Delivery Year = 10,975 MW

• Typical Economic Energy DR in market = ~50 MW

• DR Synchronous reserve capability ~ 320 MW, typical amount in market ~65 MW

• DR Regulation capability ~ 10 MW, typical amount in market ~ 3 MW

PJM©20155

Specialize in DR/EE services and do not supply the energy needs of their customers

Who Offers Demand Response into PJM’s Markets Today?

www.pjm.com

Some retail suppliers provide DR/EE services to their customers

CompetitiveRetail

Suppliers

Curtailment Service

Providers

Retail Choice States

•Utility DR/EE programs offered to SOS/BGS/POLR customers

•Utility DR/EE programs offered to any customers

Vertically Integrated States

•Utility DR/EE programs offered to the utilities customers

Utilities

PJM©20156

Registered Demand Response by State Delivery Year 2014/15

www.pjm.com

• LSE category = DR offered by utilities/Electric Distribution Companies (or their agents) and competitive retail electric suppliers• CSP category = DR offered by entities specializing in demand response and do not serve energy needs of customers

PJM©20157

Demand Response RegistrationsBusiness Segments in 2014/15

www.pjm.com

PJM©20158

Demand Response RegistrationsReduction Methods in 2014/15

www.pjm.com

PJM©20159

Demand Response Revenue by Year by Wholesale Service

*Capacity Net Revenue inclusive of Capacity Credits and Charges

PJM©201510

Price Responsive Demand Implemented by PJM in 2011 & 2012

• New option for wholesale participation by load reduction capability• Market rules require:

– Metering capable of providing hourly interval usage values

– Dynamic retail rates that are triggered by nodal Locational Marginal Prices in the PJM energy market

– Automated response (and supervisory control for capacity market participants that can override automated controls

www.pjm.com

PJM©201511

Today’s Economic Dispatch of Supply Resources

MW

www.pjm.com

PJM©201512

Dispatch Incorporating Price Responsive Demand

Dispatch $85 resourcesDispatch $90 resources

Load Curve

$88 Price-Responsive Demand

Same area of detail

No dispatch of additional resources due to demand response at indicated price level

Load Curve without PRD

www.pjm.com

PJM©201513

Distributed Energy Resources – the Vision

www.pjm.com

Presentation in Irvine, CA, February 2015 by Sean P. Meyn of the Florida Institute for SustainableEnergy, Dept of Electrical & Computer Engineering, University of Florida

PJM©201514

Load Curve

Usage Value (kW)• Consumers decrease energy demand during

all hours of the day

• Consumers decrease demand during peak load times- may shift load to higher than baseline after

Monetary Value ($)

• Value in Energy Market (Money saved through decreased energy usage)

• Value in Capacity Market (Revenue in PJM capacity payments in RPM)

Energy Market • ~90% of Cash Flow • ~5% of Cash Flow

Capacity Market • ~10% of Cash Flow • ~95% of Cash Flow

Comprehensive Plan: EE & DR

Energy EfficiencyEnergy Efficiency Demand ResponseDemand Response

Used Average price, cleared MW in PECO for DR, EE $ value calculations

RPM eligible kW RPM eligible kW

Capture highest value from each to maximize returns under one, comprehensive energy plan