1. Smart Grids:
Enabling Demand Response
Dr. Rahul Tongia
Program Director
Center for Study of Science, Technology & Policy Bangalore
Carnegie Mellon University Pittsburgh, PA, USA
Dr. Rahul Walawalkar Anupam Thatte
Sr. Consultant Research Engineer
Customized Energy Solutions CSTEP
Philadelphia, PA, USA Bangalore, India
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2. Outline
• What is a Smart Grid?
• Why do we need Demand Response?
• How smart grid can enable Demand Response?
• Drivers & Key Issues for adaption of Smart Grid
• Smart Grid Initiatives around the world
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3. “Smart Grid”
“A smart grid delivers electricity from suppliers to consumers
using digital technology to save energy, reduce cost and
increase reliability.”
Wikipedia
(More formal definitions are far more complex)
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4. Smart Grid Functionality
Objectives of the smart grid are
Enabling informed participation by customers
Accommodating all generation and storage options
Enabling new products, services, and markets
Providing the power quality for the 21st century economy
Optimizing asset utilization and operating efficiently
Addressing disturbances through automated prevention,
containment, and restoration
Operating resiliently against all hazards
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Source: US Department of Energy
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5. Broader Aspects of Smart Grids
• Generation
Distributed Generation & Renewable Integration
• Transmission
Improve transfer capacity & Maintain Reliability (avoid blackouts)
• Distribution
Area of most effort
One aspect is “smart metering”
Demand Response aka Load Control
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6. Why demand response ???
In electricity markets where all generators are paid the market clearing price
under the uniform price auction structure, DR can result in an appreciable
reduction in system marginal costs of production during peak time.
Various studies have suggested a goal for at least 5% of demand response in
competitive electricity markets to mitigate issues such as market power,
uneconomical investment in peaker units.
Recently some researchers and policy makers have suggested DR can also
play a role in mitigating the variability in supply introduced by renewable energy
sources such as wind and solar PV.
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7. Variability in Demand
Source: Walawalkar et.al 2007
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8. Marginal cost of electricity depends on the demand
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Source: Walawalkar et. al 2008 Adapt colour
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9. Variability in Hourly Energy Prices
in different regions from year to year
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10. Types of DR Programs
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11. Potential benefits of demand response:
• Increased competition
• Operational savings
• Lower market prices
• Reduced price volatility
• Improved grid reliability
• Improved customer options
• Providing ancillary services
• Positive environmental benefits
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12. Role of Smart Grid in Enabling DR
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Source: Walawalkar et. al 2007 Company Logo
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13. Integrating energy efficiency and demand response
Equipment / DR Programs
Customer
Building Control Strategy Emergency Economic Ancillary
Type
Component (Capacity) (Energy) Services
Air Conditioners Cycling/Forced Demand Shedding
Water Heaters Cycling
Residential
Pool Pumps Cycling
Demand limiting during on peak
Chillers
period
Commercial
Chillers Pre-cool bldg over night- storage
HVAC DX Forced Demand Scheduling
Refrigerator/ Prioritized Demand Shedding
Scheduled dimming of selected
Lighting
circuits
Chillers Demand Limiting on time Schedule
Electric Furnace Curtail (during peak period)
Industrial
VSDs Limit Output on Scheduled basis
Production Eqpt Prioritized demand on selected units
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Source: Walawalkar et al 2008 Adapt colour
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14. Smart Grid Challenges
Are all players aligned?
Consumers
Worry about complexity and uncertainty (and privacy)
Utilities
Today, earn more by selling more (“costs-plus”)
Regulators
Will they allow new tariffs, pass-through of costs, etc.?
Complementary players (telecom, appliances,
energy managers, etc.)
Are they ready?
Policy-makers
Is there the political will for change?
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15. Developing Regions:
Real Challenges
Dramatically higher growth rates of energy demand
~10% annual growth (demand)
Shift to “modern” energy sources
Utilities there have limited R&D or IT skills
Struggle with financial and energy losses, including theft
IF they leapfrog, there may be an OPPORTUNITY!!!
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16. Reality Check
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17. Drivers for Smart Grid & DR
US and Developed Countries India & Developing Countries
> Meter reading > Power system is a mess
> Grid modernization • Loses Rs. 1/kWh on average
> Robustness • Supply << Demand
• Typical requirements of 15-18% • 20+% shortfall
system reserves for grid reliability > Growth is a big need
> Saving $$ > Theft is a major concern
• Deregulation exposed hidden • Large segment of load is
costs unmetered (agriculture)
• Needs Time of Use (ToU) if not > Reforms ongoing
Real Time Pricing (RTP)
• May allow new operating models
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18. Future (or even Subtle) Drivers
US and Others India
>Carbon and green >Remove the “human
>Bi-directional power element” in operations
• (Plug in) Hybrid vehicles >The peak is NOT industrial
>New services >Smart peak management
• Home automation • No more load shedding
• Home monitoring • Even in emergencies can allow
• Green Power smart control
>LEAPFROG
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19. Current Smart Grid Initiatives
Electric Power Research Institute (EPRI-IntelliGrid)
National Energy Technology Labs (NETL-Modern Grid)
EU (European Technology Platform: SmartGrids)
IEEE P2030 workgroup & SCC21 Smart Grid Standards
GridWise Alliance & GridWise Architecture Council
National Institute of Standards and Technology
(NIST Smart Grid Interoperability Standards Project)
and many many more ….
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20. Conclusions & Policy Recommendations
Experience in US Markets indicate that
Reliability based demand response programs are able to achieve desired
level of participation due to significant capacity revenue potential and
limited response requirements.
Economic demand response program participation is much smaller.
Policies that can bring low cost DR in market should be explored
and encouraged to maximize the economic benefit from DR
Significant opportunities exist with advances in energy efficiency
technologies & smart grid implementation.
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21. Thank You!
Contact Information:
Rahul Tongia Ph.D.
tongia@cstep.in
Center for Study of Science, Technology and Policy (CSTEP), Bangalore,
India
Dr. Rahul Walawalkar Ph.D., CEM, CDSM
rahul@ces-ltd.com
Customized Energy Solutions Ltd.,
Philadelphia, PA, USA
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