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Demand response Texas

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Demand response Texas

  1. 1. 1 Demand response - Texas Demand response has a role in introducing energy efficiency to Texas to the electric grid. High temperatures during the summer months means a sharp spike in electricity demand during peak hours as air conditioning use increases. Reducing demand via demand response can make a significant difference in saved costs, carbon emissions, and alleviate pressure on the grid and avoid rolling blackouts. Demand response also circumvents the expensive process of building new power plants to meet peak demand. Incentives for households to take part in demand response include credits in additions to the intrinsic reduction in costs due to reduction in energy consumption. In Texas, demand response programs are voluntary. They allow utilities to power down air conditioners, heaters, and pool pumps during peak demand. According to CPS Energy, its demand response programs saved 47 MW1 of energy during the polar vortex – the spike in air conditioning use that almost caused rolling blackouts. The Electric Reliability Council of Texas (ERCOT) offers the following programs to provide payments to federal customers for load curtailments:  Load Resource Participation in the Ancillary Services Markets: Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, and all programs require that customers have real-time telemetry installed. For the Responsive Reserve and Non-Spinning Reserve markets, capacity payments are made regardless of whether the customer is called upon to curtail.  Voluntary Load Response: Customers may be able to receive financial benefit from their electricity provider for curtailing load at their discretion, when wholesale electricity prices are high.  Emergency Response Service (ERS): As with the Load Resource program, customers bid to provide load reductions. However, this program is aimed solely at alleviating emergency (as opposed to high price) conditions on the ERCOT grid2 . Customers receive compensation through these programs directly from their Retail Electricity Providers (REP), via a contractual arrangement. Transactions with ERCOT are conducted by the qualified scheduling entity (QSE) for the customer’s REP. Other programs in Texas include:  CenterPoint Energy’s Commercial Load Management program provides up to $31.50/kW to participants for curtailing load for up to four hours during four unscheduled peak (1-7 p.m.) events during summer weekdays (June 1-September 30).  AEP provides a Load Management Standard Offer program to its distribution customers with demand of at least 500 kW who are prepared to curtail electric load with one-hour notice. AEP 1 Malewitz, J. (2014). “Demand Response Could Factor in Grid Debate.” The Texas Tribune. Retrieved November 6, 2015 from http://www.texastribune.org/2014/01/24/demand-response-could-factor-grid-debate/. 2 Taken directly from U.S. Department of Energy: http://energy.gov/eere/femp/energy-incentive-programs-texas
  2. 2. 2 offers the program in all three of its service territories: Texas Central (TCC), Texas North (TNC), and SWEPCO.  The Entergy Texas Load Management Program offers $15/kW for one 1-hour scheduled curtailment, and $25/kW for unscheduled curtailments (maximum four).  El Paso Electric offers its Load Management program to customers who can curtail at least 100 kW per participating site during the summer (June 1 through September 30) with one-hour notice.  Texas-New Mexico Power Company’s (TNMP) 2015 Load Management Standard Offer program offers incentives of up to $40 per kW for curtailing at least 50 kW for a maximum of 18 hours total  Oncor’s Load Management program  Xcel (Southwestern Public Service Company) offers several load management programs beyond their Load Management Pilot Standard Offer Program  CPS offers its Demand Response program to customers with a curtailable load of at least 50 kW per single site. Incentives are based on verified performance during peak events, which can be called with a two-hour advance notice between 1 and 7 p.m. on weekdays from June 1 to September 30 (though they typically occur between 3 and 6:30 p.m.). Customers may choose to receive incentive payments as a check or as a credit posted to their account3 . Impacts of demand response programs A study from the South-Central Partnership for Energy Efficiency as a Resource (SPEER) modeled the impact of a demand response of 500 megawatts (MW) bid at $300 per megawatt-hour (MWh), another 500 MW at $500 MWh, and 500 MW at $1000 per MWh. SPEER measured the impact of this demand response on average locational prices on five specific days where prices were higher than normal. In this scenario, demand response saved almost $85 million in costs in June 2012, and $52 million in March 2012. 4 3 Taken directly from U.S. Department of Energy: http://energy.gov/eere/femp/energy-incentive-programs-texas 4 Source: SPEER http://www.greentechmedia.com/articles/read/demand-response-could-have-saved-texans-85m- in-one-day
  3. 3. 3 According to a 2013-14 report published by ERCOT, there is an overall load reduction of 90.24MW if the price spike is set at $300/MWh; a load reduction of 91.98MW if the price spike is set at $1000/MWh; and a load reduction of 180.44MW if the price spike is set at $3000/MWh5 . 5 P.36. Frontier. “2013-2014 Retail Demand Response and Dynamic Pricing Project Final Report.” http://www.ercot.com/content/services/programs/load/2013- 2014_DR_and_PriceResponse_Survey_AnalysisFinalReport.pdf

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