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Demand Response: The Key to a Competitive Facility


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Thirty states in the United States have renewable portfolio standards. The U.S. EPA is targeting many coal plants for shutdown. Electricity rates may rise 50% in five years. Electric vehicles could add significant strain to an aging infrastructure. Wind and solar could add significant instability to power quality and reliability. Demand response (DR) is the answer to remaining globally competitive in an uncertain energy future. Once a novel way to earn extra cash, DR is rapidly becoming a key competitive strategy as utilities realize they must encourage more interaction with customers. Explore the evolving world of DR and how to plan for it. Copyright AIST Reprinted with Permission

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Demand Response: The Key to a Competitive Facility

  1. 1. Demand Response: The KEY to a Competitive Facility Phil DavisSenior Manager, Demand Response Resource Center Schneider Electric
  2. 2. Energy costs will quadruple by 2030. Power Qualitywill degrade. Global competition for fuel, tightening emissions requirements, and laws demanding renewable integration will place unimaginable pressure on a grid that is decades old.Smart Grid can fix this, but no longer can we exist in isolation.
  3. 3. What makes the Smart Grid Smart? You DoSmart Grid is Communicationsbetween Utility and Customer
  4. 4. The Energy Dilemma Sustainability and Carbon ManagementGrowing pressure Rising consumptionon infrastructureVolatile Wholesale More ambitiousEnergy costs environmental goals Fiercer globalWater shortages competitionTighter economic Regulatorypressure Complex sourcing demands options We need to solve these challenges to make the difference!
  5. 5. Energy is a Management ChallengeDemand Response is a Management Solution
  6. 6. What Customers Look Like to Utilities
  7. 7. Pre 1990 Power GridPhysical & Generation Transmission Distribution Distribution ConsumersTransaction Flow Players Utility Systems Scada, Control Room (DMS), Outage Mgmt, Meter Data, Forecasting, CIS
  8. 8. The new Grid equation - detailed drivers acceleratorsGrowing electricity demand: New technology available-new economies: demography, -information technology, cyber-security industrialization & urbanization -energy storage, power electronics…-mature economies: peak management-new consumption modes (eg electrical vehicles) Active government & regulators: -deregulation & opening of markets,Need to reduce CO2 emissions: introduction of price transparency-development of Renewable Energy sources -need for security of supply & price stability-focus on energy efficiency -increasing economic cost of blackouts -stimulus packages, investment in electrical vehicles…Constraints on existing networks:-limited generation capacity Active end-users: -look for competitive prices-limits on network extension -want to contribute to CO2 emissions reduction (Not In My BackYard syndrome)-aging infrastructure and assets -ready to play active role (control consumption,-integration of intermittent & distributed generation produce energy, drive electrical cars…) making the smart grid happen
  9. 9. Post 2000 Smart Grid Physical Flow Generation Transmission Distribution Consumers Genco Transco Utility Marketer Players Renewco DR Aggregators ISO C&I Onsite Demand ManagementTransaction Flow Systems Scada, Control Room (DMS), Outage Mgmt, Meter Data, Forecasting, CIS Upgraded + Energy Mgmt, Trading/Risk, Settlement, Billing, Scheduling, Portfolio Mgmt. Upgraded + Demand Mgmt., Customer EMS, NOC, AMI, Communication, BAS/Energy Controls
  10. 10. Different Regions, Different Goals Smarter Grids Deregulation & Distributed Transmission overload Generation & aging infrastructure • Competition for supply • Blackouts • Integration of Renewable • Critical peak situations Energy sources • Price volatility • Increasingly constrained networks • Cyber-security issues Growing energy Growing energy demand • Growing consumption demand… and losses • Transmission congestion • Critical peak situations • Energy theft • CO2 emissionsDistribution infrastructuremodernization• Growing consumption• Energy theft & losses• Generation & Transmission modernization
  11. 11. Demand Response =Comprehensive Energy Strategy ● Environment ● Procurement ● Reporting (SOX) ● Efficiency ● Safety ● Reliability ● Stability
  12. 12. Integrated Demand Response Normal Process ProcurementShut downs Manual Coordination StrategicUnusual AutomatedDelayedpayments Mid Stream Sophisticated Little Feedback Storage Algorithms
  13. 13. Tools: ISO 50001
  14. 14. Case study - Global Pharmaceutical Tech Company Plan Strategy Situation:  Global pharmaceutical tech company wanted to cut energy costs in its facilities across 4 continents  Needed an efficient way to involve a number of global facility-level personnel in the process Solution:  Consumption Workshop, proprietary exercise to uncover strategies for reducing energy costs and usage  Forum for plant personnel to collaborate with corporate leaders about key projects and strategies  Employees from 16 facilities, including sites in France, Italy, Belgium, United Kingdom, Puerto Rico and the U.S., participated in the workshop. Results:  Identified $2.6 million in energy savings during the Consumption Workshop, most of which could be realized with little or no capital investment.  Savings represented 9% of the company’s total annual energy spend  Collaboration among the facility teams for the first time
  15. 15. Case Study - Global Manufacturing Company How Do I Buy? Situation:  Decentralized global manufacturer with 44 sites in 18 countries with each site handling energy management efforts independently Solution:  Identified countries in the portfolio that offered greatest opportunities  Reviewed risk management and tariff and sourcing options  Large site in Singapore was about to enter into a new contract that would lock in electricity price that Summit team anticipated would go lower  Recommended waiting to lock to take advantage of expected downward market movements that would save the company money Results:  The company centralized its approach  Corporate energy leader could make more informed hedging decisions across all 44 facilities.  Singapore site lowered its long-term electricity costs, eliminating potential volatility, saving 10%
  16. 16. Case Study - Automotive Company How Do I Control? Installed Enterprise Energy Management System (EEM)  Smart energy monitoring resulted in:  Cost savings  Faster access to reporting  Conservation initiatives Ongoing Measurement & Verification  Measurement and Verification continues the lifecycle focus and leads Ford through revisiting their energy strategy
  17. 17. Case Study - Veolia, Indianapolis LLC How Do I Optimize? Production process scheduling  Install WAGES monitoring & control to forecast filter loadings and initiate backwashes to avoid peak utility demand periods Pumping system optimization  Provide demand sub-metering and hydraulic modeling intelligence to optimize system for any given flow and pressure condition Install adjustable speed drives  Control inefficient discharge valve control to maintain Results system pressures and flows at desired levels $764,630 annually Diesel driven pumping 3.2 year payback  Install WAGES monitoring & control to monitor 6,818 kW critical parameters, remotely start/stop pumps during 12,458,300 kWh peak electrical periods to reduce utility charges -3,690 dT On-site generation  Fully monitor and automatically operate on-site diesel generators for peak efficiency
  18. 18. Case Study - Global Glass Manufacturer How Am I Performing? Situation:  One of the largest glass manufacturers in the world, producing 30 billion glass containers a year  Needed help tackling its sustainability challenge Solution:  With access to the company’s corporate-wide energy information, analyzed data to create GHG emissions baseline  Developed GHG inventory by defining boundary conditions, outlining scope definitions upon verifiable data and auditable processes Results:  The glass manufacturer could track and report on greenhouse gas emissions at both the site and enterprise levels.  The company began to leverage emissions data from multiple streams and scopes, benchmark performance against baseline data, and maintain a database of sustainability project initiatives  Gained an understanding of historical emissions data, used information for corporate sustainability benchmarks and initiatives
  19. 19. Strategic Improvement Roadmap Develop Energy Strategy •Determine corporate profile •Set goals & objectives Implement Reporting Program •Develop management plan •Establish measurement & reporting structure •Set baseline with third-party verification Evaluate Footprint & Prioritize Actions •Identify top demand sources •Commit to targets •Create performance metrics (KPIs) Implement Optimization Activities •Reduce (raw material, energy, water, waste) •Renew (renewable energy, recycle, treat & reuse) •Restore (offset impact, manage credits) Communicate Results & Performance •Voluntary / mandatory reporting •Internal communications •External communications
  20. 20. Demand Reduction Identification Schneider Electric Energy Solutions Provided a Demand Reduction Plan for a large Iron Manufacturer Estimated Thyssenkrupp/Waupaca Plant #5 Electric Load Breakdown (kW) 7/8 Furnace Inductor , 840 Lighting, 300 Motors Dust Collectors 5/6 Furnace Inductor , 840 Air Compressors Transformer Losses, 1,106 HVAC, 300 Air Separation Plant Task: Find demand reduction measures after Furnace #3 Inductors, Misc, 200 Motors, 11,969 Furnace #1 Inductors 1,440 a rate structure change increased monthly Furnace #2 Inductors, Furnace #2 Inductors Furnace #3 Inductors electric costs 1,440 Transformer Losses Furnace #1 Inductors, Five demand reduction projects were 1,440 5/6 Furnace Inductor 7/8 Furnace Inductor identified Air Separation Plant, 1,600 Lighting Dust Collectors, 3,758  Demand savings are 3,500 kW Air Compressors, 3,988 HVAC Misc  Electric savings are 15,141,360 kWh WF Elelctric Demand Profiles  Electric cost savings are $823,200 per year Stacked Line Chart - May 2009  Implementation cost is $710,700 with an estimated payback period of 0.9 years 30,000 Detailed reporting that describes 25,000  Existing demand profile, with analysis for the summer, winter, and shoulder months  20,000 Electric Demand (kW) Peak electric load breakdown  Current rate schedule  Estimate of demand curtailment hours 15,000  Demand reduction measures with conceptual implementation methods and estimated costs  10,000 Description of available rebates and incentives  Additional opportunities for energy savings 5,000 The detailed report utilized data from the enterprise metering system to complete the 0 analysis 5/9/09 5/11/09 5/14/09 5/16/09 5/19/09
  21. 21. Integration PotentialPower Value propositionProcess ONESite up capital for strategic investment by reducing Freeing Site Supervision your energy use up to 30% IT Manager  Safeguarding the assets that make your enterprise successfulFacility  Reduce your total cost of ownershipSecurity  Enhance facility market value (5 to 10%)
  22. 22. Energy MonitoringEnergy Modeling provides a means to normalize usage and factor out the influences of weather and production
  23. 23. By meeting the IEA estimate of 16% chemical industry energy efficiency improvement by 2020, a major chemical company could lower its annual energy bill by $4.3 Billion vs. its 2008 spend11 National Academy of Engineering, Potential of Energy Efficiency,
  24. 24. Information does change behavior: 6% just being availableAs much as 30% when informed action is taken
  25. 25. Thank You Phil DavisSenior Manager, Demand Response Resource Center Schneider Electric