Demand Side Response Participation
In the Energy & Ancillary Service Markets
Scott Benner
PJM Interconnection, LLC
www.pjm.com
PJM©2012
PJM as Part of the Eastern Interconnection
• 26% of generation in
Eastern Interconnection
KEY STATISTICS
PJM member companies
750+
millions of people served
60
peak load in megawatts
163,848
MWs of generating capacity
185,600
miles of transmission lines
65,441
GWh of annual energy
832,331
generation sources
1,365
square miles of territory
214,000
area served
13 states + DC
Internal/external tie lines
142
• 28% of load in Eastern Interconnection
• 19% of transmission assets in
Eastern Interconnection
21% of U.S. GDP
produced in PJM
As of 1/4/2012
www.pjm.com
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Demand Response Registrations & Business Segments
• Demand Response are represented by Registrations
• Registrations are made up of one or more Locations (sites)
– Each Location is an EDC Account / meter point
www.pjm.com
1.
2.
3.
4.
5.
6.
7.
8.
Retail
Industrial/Manufacturing
Office Building
School
Hospital
Food Service
Warehouse
Residential
Example Devices
eLRS Types
Least Common … Most Common
• Locations contain one or more Devices that can provide
wholesale ancillary services
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


HVAC
Lighting
Environmental Controls
(Temperature)
Energy Storage
Manufacturing Processes
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Demand Side Participation in PJM
• Where we’ve been.
• Where we are.
• Where we’re going . . .
www.pjm.com
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Demand Response History at PJM
• On 6/1/2006, PJM enacted tariff & market rule
changes to allow Demand Side Resources to
participate in the capacity, energy and ancillary
service markets
– Resources 500kW and larger were eligible to
participate in the ancillary services
– No more than 25% of each ancillary service market’s
requirement could be serviced by demand side
resources
• Synchronous Reserve
• Frequency Regulation
• Day-Ahead Scheduling Reserves
www.pjm.com
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Demand Response in the Capacity Market
• RPM delivery year 2007-2008 was the first containing
DR products, most as Interruptible Load for Reliability
• Looking forward to DY2012-2013, Demand Side
Resources providing emergency energy curtailments &
efficiency improvements will make up 7% of the
“installed capacity” in PJM
Nuclear, 33708, 17%
Natural Gas, 49183, 25%
Coal, 77696, 39%
Petrolium, 14475, 7%
Renewables, 10115, 5%
Demand Side, 14007, 7%
www.pjm.com
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Demand Response in Synchronized Reserve
• In Sept 2006, PJM qualified its first DSR to provide
synchronous reserve
– A resource that is consuming energy provides reserve by
curtailing its demand within 10 minutes upon request
– A Curtailment Service Provider (CSP) offers the resource to the
market and coordinates with PJM Dispatch
– PJM requires 1-minute interval data submitted via eLRS for M&V
• On 10/14/2006, PJM issued its first synchronized
reserve event with an assigned demand side resource
• While individually small, many resources can collectively
provide the same MW of reserve as a generator
www.pjm.com
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PJM©2012
www.pjm.com
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May 2012
Apr 2012
16.85%
17.38%
17.53%
16.91%
17.06%
15.58%
15.38%
16.28%
14.95%
14.57%
14.14%
12.45%
840
700
560
7.5%
420
5.0%
280
2.5%
140
0.0%
0
Average Market Requirement (MW)
20.01%
20.32%
19.46%
22.28%
20.0%
Mar 2012
Feb 2012
Jan 2012
Dec 2011
12.52%
16.58%
17.5%
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
14.54%
14.46%
14.67%
13.29%
12.07%
10.0%
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
15.46%
14.64%
14.85%
13.93%
15.0%
Jun 2010
May 2010
Apr 2010
Mar 2010
14.18%
13.49%
12.5%
Feb 2010
Jan 2010
Maximum DR Penetration (% of Req.)
Demand Response Participation in Synchronous Reserve
Synchronous Reserve DR Participation by Month
25.0%
1400
22.5%
1260
1120
980
As of 5/15/2012
PJM©2012
Addressing Barriers to Entry to the Ancillary Service Markets
• Advanced Technology Pilot (ATR) Program
– Asset owners work with Applied Solutions dept. to investigate
technologies that don’t quite fit current market rules
– Over time, pilots move to production, and compensation
• In Summer 2011, PJM began the stakeholder process to
lower the qualification limits from 500kW to 100kW
– FERC approval was effective 10/20/2011
– PJM & members agreed to delay implementation to after AC2
www.pjm.com
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Demand Response in Frequency Regulation
• On 11/21/2011, two Demand Side Resources began
participation in PJM’s Regulation Ancillary Service Market
– A resource that is consuming energy continuously increases or
decreases demand in response to a PJM issued control signal
– PJM requires 10-second interval metering via DNP3 for M&V
• Demand Side Resources provide regulation service using
–
–
–
–
www.pjm.com
Pumps at a municipal wastewater treatment plant
Battery bank at a manufacturing facility
Ceramic “thermal storage” bricks in residential communities
Electric vehicles parked at charging stations
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Typical Demand Response to Regulation Control Signal
0.10
0.08
0.06
0.04
MEGAWATTS
0.02
0.00
-0.02
-0.04
This registration is a network of many pumps,
each raising and lowering consumption relative to
the regulation signal while honoring local
operating constraints (pond levels)
-0.06
-0.08
Regulation Signal
www.pjm.com
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14:00
13:55
13:50
13:45
13:40
13:35
13:30
13:25
13:20
13:15
13:10
13:05
13:00
-0.10
Response
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Demand Response in Day-ahead Scheduling Reserve
• Day-Ahead Scheduling Reserve (DASR) Market,
formerly the Operating Reserve service
– PJM maintains an operating reserve for each hour of the day
• When the reserve requirement is not met, either additional
generation is dispatched on-line or DR is assigned to curtail
– A resource that is consuming energy is paid to curtail energy in
the assigned hours, if directed to curtail by PJM Dispatch
• Market clearing price correlates to high demand days
DASR MCP
– For year 2012, the reserve requirement is 7.03% of forecasted
demand
$1,000.00
$100.00
$10.00
$1.00
$0.10
$0.01
2011
J
www.pjm.com
F
M
A
M
J
J
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A
S
O
N
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Demand Side Participation in PJM
• Where we’ve been.
• Where we are.
• Where we’re going . . .
www.pjm.com
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It’s Been a Busy 2012 So Far . . .
• Raising the 25% DR Participation Limit
– Although the limit has never been reached, this is considered a
barrier-to-entry by the industry
• The highest DR participation in the synchronous reserve market in a
single hour to date was 22.3% in Mar 2012
– On 4/23/2012, in the Demand Response Subcommittee, PJM
began the stakeholder process to alter the limit
• Continued investigation into advanced technologies
– Behind-the-meter energy storage devices (thermal, batteries)
– “Ultrabattery” ultra-capacitor / lead-acid battery hybrid
– Networked mobile electric vehicles providing regulation
www.pjm.com
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Demand Response in the Energy Markets
• Day-Ahead and Real-Time Energy Markets
– A resource that is consuming energy curtails its
demand via Emergency Energy directives by Dispatch
• On April 1st, 2012, implemented FERC Order 745
– Supply-side offer curves for Economic DR participants
– DR can set LMP, get paid full LMP for curtailments
– Net Benefits Test
• On May 14th, 2012, FERC accepted PJM’s Price
Responsive Demand (PRD) filing
– Demand-side offer curves for Economic DR participants
www.pjm.com
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Performance Based Regulation
• On May 17th, 2012, FERC issued a ruling
approving PJM’s Performance Based Regulation
• Continuous, hourly performance scores for each
regulating resource based on
– Accuracy
– Timeliness
– Precision
• Payment based on performance AND MW
offered into the market
www.pjm.com
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Demand Side Participation in PJM
• Where we’ve been.
• Where we are.
• Where we’re going . . .
www.pjm.com
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Changes in Registration Aggregation
• In Winter 2011, PJM began the stakeholder process to
address metering and grouping of Registrations
– Registrations cannot use sub-metering for M&V
– Registrations cannot group Locations across transmission
zones, or resources > 100 kW
– PJM Markets use offers at the Registration level
• On April 2nd, 2012, PJM filed with FERC to allow submetering for Regulation M&V, effective June 1st, 2012
– Also allows multiple CSP at same location, different devices
• Aggregation currently being discussed in
– Demand Response Subcommittee for Energy
– Regulation Performance Senior Task Force for Regulation
www.pjm.com
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Coming Attractions
• Implementing Performance Based Regulation
– Scheduled for production on Oct 1st, 2012
• Smart Meters & “Prices to Devices”
– Price Responsive Demand Nodal Pricing
• “Unrestricted” Load Forecasting
– PJM predicts load using historical similar days, weather
– Models will adjust for DR curtailing for Economics
www.pjm.com
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Fast Demand Response Opportunities
• Fast Demand Response can provide
– Price-sensitive Energy curtailments
– Synchronous Reserve service
– Frequency Regulation service
… any wholesale service that a generator
can provide !
www.pjm.com
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