Presented by Ove Grande, SINTEF Energy Research, Norway, at the IEA DSM Workshop in Trondheim, Norway on 18 April 2012.

1. Technology for a better society 1
Ove S. Grande
Senior Research Scientist
SINTEF Energy Research
Market Based demand Response
Results from Norwegian Research
Projects
IAE/DSM workshop, Trondheim
18 April, 2012

2. Technology for a better society 2
Outline
• Introduction
• Marked Based Demand Response – Value of demand side price
elasticity
• Examples from Norwegian pilot tests – lessons learned
– Load shifting – remote control
– Innovative Power contract: "Fixed Price with return option"
§ EcoGrid EU (FP7) Large scale smartgrid demonstration of an advanced
market concept

3. Technology for a better society 3
NorNed
Power Exchange: Nord Pool
Common Balancing Market
Ø Nordic system:
91 GW (47 GW
hydro)
Ø Central European
system: 667 GW
Ø Development towards
integration in Europe:
n Market coupling DA
(TLC, CWE)
n Implicit auction on all
HVDC links
n Integration of
balancing markets
Nordic system
Central European system

4. Technology for a better society 4
Electricity consumption in Norway
• Total 127 TWh (07)
– Heating: ca 35 TWh
– Large industrials: ca 40 TWh
• Peak load: 23 994 MW
• A large (theoretical) DR potential
– Industry ~3 000 MW
– Residential and commercial: ~1 700 MW
• Production (99 % Hydro): average 130 TWh/Year 50 TWh variation
between wettest and driest year

5. Technology for a better society
Monopoly - competetion
Kraftleverandør
Power
supplier
Market
operator
(NordPool)
TSO
(Statnett)
Authorities
(NVE)
Revenue cap
regulation
RPM Elspot
Agreements
Monopoly Market
Revenue
cap
regulation
SluttbrukerCustomers
NettselskapDSO
Network tariff Energy price

6. Technology for a better society 6
Remote controlled or automatic
load reduction
Price
dependent
load reduction
Demand side participation in market and system
operation"
Market phases
Quantity
Price hedging
phase
Spot
phase
Price
Time
Control phases
Pre-operational
phase
Production
planning /
Bidding
Regulating
Power
Operational phase
0
2
4
6
8
10
12
Spot trade
Bilateral trade
4 8 12 16 20 24
Option
Market for Reserves

7. Technology for a better society 7
Value of demand side price elasticity
Load
Manual
load shifting
Original demand
Automatic load shifting
Price-
dependent
response
Price
p0
p1
V0V1
Remote
controlled
load
reduction
Price
dependant
load
reduction
Market
phases
Quantity
Price
hedging
phase Spot
phase
Price
Time
Control
phases
Pre-­‐operational
phase
Production
planning
/
Bidding
Regulating
Power
Operational
phase
0
2
4
6
8
10
12
Spot
trade
Bilateral
trade
4 8 12 16 20 24
Option
Market
for
Reserves
Less than100 MW load reduction would
have
reduced the price from 13 NOK to 1 NOK

8. Technology for a better society 8
Price and CO2 emision impact
Marg. Cost
[€/MWh]
(CO2 ~30 €/t)
40
80
Hydro/wind
nuclearLignite
Coal
Gas b
Gas p
Oil cond
CO2 emission
0,5-1 t/MWh
Consumption peak
Volume (MW)

9. Technology for a better society 9
Benefit for customers
€/MWh
Δp
Cost reduction for the
Responsive customer
Every customer will
benefit
from the reduced
average price

10. Technology for a better society 10
Present contract types Norway
• Standard Variable Price (SVP)
• Spot Price (SP)
• Fixed Price (FP)
SVP
S
P
F
P

11. Technology for a better society 11
Status AMR Norway
• Full roll out of Automated Metering and Control systems (AMS) by the end of
2016
• Functional requirement
– Register and store with a sampling frequency of 60 min (optional15 min )
– Disconnect or limit power output
– Exchange price information
– Prepared for both output and input of energy on customer (prosumer) level
– Standardized interface for communication with external equipment (display)
– Connectable to other meter equipment
– Secure storage of data in case of voltage interruption
– Data security measures

12. Technology for a better society 12
Market based Demand Response Project
(2005-2008)
Pilots
1. ”Remotely controlled Load shifting" – peak load reduction
2. ”Fixed Price with Return option” - reduction of energy in shortage periods
3. Automatic Demand Response (ADR)
4. ”Smart house – ToD tariff” – housing cooperative

13. Technology for a better society 13
Household
electricity
consump2on
in
Norway
Space
heating
Water
heating
Approx 80% of electricity
consumption relates to
water and space heating.
Source: : EU/
REMODECE

14. Technology for a better society 14
Pilot I “Remotely controlled Load shifting – ToD tariff“
• Test group: 41 household customers
• Network tariff: Time of Day tariff with high price in periods with
expected shortage (+ 0,10 € , Mon-Fri, hour 9-11 and 17-19)
• Energy price
- Hourly spot price (free choice of supplier)
• Remote control of water heaters (2-14 kW) via AMR in the defined
periods
• ”El-button” reminder

15. Technology for a better society 15
time
Pilot I
Results
Positive response from
all customers.
No cold water complaints.
Accumulated
600 -1000 MWh/h
load reduction in peak hour
indicated.
Automatic load reduction
in peak load periods gives
a stable demand response

16. Technology for a better society 16
Pilot II
Fixed price with return option (FWR)
• Fixed Volume - financial contract
combined with spot price settlement
• Objective /characteristics
– Give incentives to load reduction in periods with shortage
– Retaining the advantages of fixed price contracts with
regard to predictable costs
– Reduce the risk for the supplier.
Ø 2500 household customers

17. Technology for a better society 17
Fixed price volume
Real
consumption
time
kWh/h
time
Sale
Fixed price
Price
Elspot

18. Technology for a better society 18
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
2004Q1 2004Q2 2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4 2006Q1 2006Q2 2006Q3 2006Q4
[Quarter]
[kWh/quarter]
FWR
Spot
SVP
+10,4%
-24,5%
+7,7%
Demand response from FWR customers
compared to alternative contracts

19. Technology for a better society
EcoGrid EU (FP7 Energy – 2010-2)
2011-15, 20, 6 M€
Ø Main objectives:
§ To demonstrate operation of
a power system with more
than 50 % renewable
sources
§ To implement ICT systems
and innovative market
solutions - offering TSOs
additional and more efficient
balancing services
§ To enhance small consumer
and local producers to
participate in the power
market through real-time
operation, energy storage
and savings
19

20. Technology for a better society
The Scope of a Real-time Market
Time scale
The EcoGrid Real-time
Market will be an
integrated part of the
current power markets
and supports the need
of direct control options
on a very short time
scale
Intra-day(Elbas) Regulating
power
market
AGC/LFC/
Frequency-
controlled
reserves Inertia
Quantity
Days Hours Minutes Seconds Now
Volatility
Direct
control
Market-based
operation
EcoGrid
Real-
time
Market
20

21. Technology for a better society
EcoGrid EU market concept
Test period autumn 2012 – spring 2014
Test site: Bornholm
Operated by the Danish DSO
Østkraft
Demonstration in a real
system with > 50 % RES
Part of the Nordic energy
market

22. Technology for a better society 22
EcoGrid EU
Planned test groups
Control
Group
2-300
FC
PV
EV
PV
Smart
Businesses
~100
Manual
control user
4-500
IBM/PowerMatcher
Users
~700
Siemens
Users
~500
??

23. Technology for a better society 23
Summing up
v Demand response can effectively be integrated into the power market.
v Full AMR-rollout will empower also the smaller customers to profit from
adaptation to different market situation.
v Demand response have significant value – relative small decline in demand
can contribute to substantial reductions in price in shortage situations.
v Temporary reduction in domestic space heating and load shifting of water
heaters are the most convenient demand response objects in Norway, and the
accumulated potential is large.
v Demand response closer to operation necessary to cope with future
challenges related to high share of intermittent production as demonstrated
the EcoGrid EU project on Bornholm (Denmark).
v PARADOX: Success with Demand Response will reduce the price differences
and thereby the potential payback for necessary investments .
Ø Additional incentive mechanisms, e.g. ToD tariffs, needs to be
considered in order to achieve wanted socio-economic benefits!

24. Technology for a better society 24
Thank you for your attention!