IEA Task XIII: Demand Response Resources

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• IEA Task XIII Demand Response Resources
• Start-up and Proposed Project Tasks/Activities
• Presented at
• Peak Load Management Alliance (PLMA) Spring
  Meeting
• San Diego, CA March 24, 2002
• Presented By
• Daniel M. Violette, Ph.D.Summit Blue Consulting
• Boulder, Colorado
• Phone [phone]
• E-mail dviolette_at_summitblue.com

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Project Tasks -- Initial Statement

• Initial views regarding Project Tasks based on
  "Concept Paper Demand Response Resources (DRR)"
• This paper builds upon several recent IEA
  activities including
• Workshop On Enhancing Demand Response In
  Liberalized Electricity Markets At IEA
  Headquarters, Paris, February 2003
• IEA Publication The Power to Choose, October
  2003, IEA Online Bookstore and
• IEA Experts Workshop on DRR, hosted by the New
  York Independent System Operator (NYISO) and the
  New York Energy Research Development Authority
  (NYSERDA) Albany, NY, September 2003.
• Objective of Experts Workshop Develop initial
  concepts for a new IEA DSM Annex addressing DR.
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Conclusions from IEA Work

• Three conclusions from prior IEA work support
  the objectives and approach
• Current market designs do not enable demand
  response due to
• out-dated metering and related technologies,
• a lack of real-time price information reaching
  consumers,
• regulated retail prices while wholesale markets
  have largely been deregulated,
• system operators focused on supply-side
  resources and,
• a legacy where demand response was not considered
  important.
• Significant investment is needed in DR
  infrastructure to enable markets to communicate
  the value and cost of electricity.
• Governments and regulators are key in enabling DR
  -- benefits of DRare dispersed among different
  market players and current markets will not
  develop a meaningful DR capability without
  facilitation.
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Objectives Developed at Initial Expert's
Workshop

• Identify and develop the country-specific
  information needed to establish the potential for
  demand response.
• Perform the market and institutional assessment
  needed to set realistic goals for the
  contribution of DRR to sector objectives.
• Mobilize technical and analytic resources needed
  to support the implementation of DRR programs and
  track their performance.
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Proposed Activities / Tasks

• Eight proposed activities and project tasks
• Task 1 -- Finalize Principles and County-Specific
  Objectives
• Task 2 -- Define the DR Resource Base and Market
  Characterization
• Task 3 Market Potential of DRR
• Task 4 Demand Response Valuation
• Task 5 Role and Value of Enabling Technologies
• Task 6 Priorities and Barriers Solutions and
  Recommendations
• Task 7 Develop DRR Network of Methods, Tools
  and Applications
• Task 8 Deliver Products and Intellectual
  Property (IP)
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Task 1 -- Finalize Principles and County-Specific
Objectives

• Define basic principles for the project
• One Global objectives based upon IEA
  principles.
• Two Country-specific objectives, with each
  participating country customizing their own
  objectives within the global objectives.
• Three Finalize deliverables and define how they
  would be applicable to each participating
  country.
• Actions
• Initial position paper on project objectives and
  deliverables
• Start-up meeting to obtain review and input on
  global objectives.
• Refine deliverables for the different Annex
  Subtasks.
• Develop country-specific objectives -- each
  country would develop its own objectives within
  the global objectives.
• For each country, identify how the deliverables
  can be applied to their markets and
  circumstances.
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Task 2 -- Define the DR Resource Base and Market
Characterization

• Characterize DR offers, products, services and
  enabling technologies.
• Identify market actors involved and the decisions
  that need to be made by market actors to
  effectively deploy DRR.
• Steps to be taken include
• Intellectual Review -- Reports, studies and any
  other relevant information on DR methods and
  applications.
• Classification Scheme -- Typology for DR
  products, services and technologies based on
  important product and delivery features.
• Characterize Methods -- Examine policies and
  processes that can be used to integrate DR into
  liberalized electricity markets.
• Product -- Best practices data base
• Identify existing DR efforts and,
• Catalogue operation and performance to create a
  best practices database.
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Task 3 Market Potential of DRR

• Build on Best Practices to determine economic DR
  within different markets and under different
  market conditions.
• Steps
• Define markets based on DR product and delivery
  pathways.
• Consider market structures, product and delivery
  needs, and objectives to be met by DR.
• Develop method(s) for estimating economic DR
  potential.
• On a regional level and on a country level.
• Develop DR potential relationships, i.e., how
  economic DR will vary given changes in key
  variables (e.g., operating reserves, peak and
  off-peak prices, customer characteristics, and
  technology costs).
• Apply methods (by request) on a regional and
  country-specific basis.
• Product -- Define attainable magnitudes of DR (or
  estimation methods) for region and
  country-specific markets (based on the market
  attributes).
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Task 4 Demand Response Valuation

• Develop the methods and procedures to establish
  the value proposition to guide DR initiatives.
• Steps
• Methods to assess the "public value" of DR --
  contributions to reliability and price
  stabilization objectives of liberalized markets.
• Methods to assess the "private value" of DR to
  market actors.
• Create an integrated value model/approach that
  characterizes the level and distribution of
  benefits associated with DR (recognize different
  market structures, product designs, and customer
  response).
• Conduct workshops to train country experts on the
  use and interpretation of the integrated value
  model -- the business case from public and
  private perspectives.
• One Concept -- Use the "value framework" combined
  with "economic market potential" to establish DR
  goals (by country).
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Task 5 Role and Value of Enabling Technologies

• Catalogue technologies and systems available for
  use in DR programs from the perspective of the
  system operator and the participating customer.
• Steps
• Develop a scheme to organize devices and systems
  according to how they provide value to customers
  and/or system operators.
• Identify current country applications, practices
  and applications, and characterize their
  performance, benefits and costs.
• Catalogue new and potential technologies and
  systems.
• Concept -- Maintain and update a catalogue of
  existing, new and potential enabling technologies
  and systems.
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Task 6 Priorities and Barriers Solutions and
Recommendations

• Establish communication channels for decision
  makers, thought leaders, and DR program
  administrators and implementers.
• Create stakeholder groups in each country.
• Implement surveys, focus groups and conduct other
  information outreach initiatives (with country
  support).
• Assess recommendations that might help overcome
  barriers.
• Develop market design and business rules to
  achieve economic DR.
• Two selected issues -- 1) Verification of
  response and 2) Integration with resource
  adequacy planning via models and operations.
• Report on barriers to meeting target levels of
  DR.
• Product Create and maintain an information
  repository that tracks the identification
  resolution of barriers (on-going best practices).
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Task 7 Develop DRR Network of Methods, Tools
and Applications

• Create a virtual center of excellence (via a web
  portal) regarding DR methods, technologies, and
  applications.
• Steps
• Use web portal and library protocols to make
  information, products, and reports from this
  effort accessible to participating countries.
• Determine whether a physical location (or
  locations) for centers of excellence can be
  developed in regions or in participating
  countries at the countrys discretion.
• Manage a periodic DRR Project newsletter to
  project participants.
• Product Virtual access to DRR information,
  tools, and best practices and newsletter.
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Task 8 Deliver Products and IP

• The delivery of the intellectual property created
  to the IEA DSM Programme and the participating
  countries.
• Steps
• Turn over of DRR Project Portal to IEA DSM IT
  team and training for ongoing operation,
  maintenance and support.
• Conduct regional workshops (4) to deliver project
  products and tools to country stakeholder groups
  and conduct training.
• Deliver Final report to IEA DSM Executive
  Committee.
• Transfer DR Project Portal operation, maintenance
  and training to IEA DSM Programme IT team,
  conduct regional workshops with Country Experts
  and Stakeholder teams, prepare final IEA report.
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Summary

• Great potential, but realizing this potential
  will be a challenge.
• Positive note -- Two IEA DR Experts' meetings
  produced useful information and some consistent
  views.
• This effort provides the opportunity for
• Overall learning.
• A focus on key pivots that can influence DR
  implementation.
• Catalogue information
• Develop value propositions and business models to
  guide initiatives and implementation.
• Focus on actionable plans
• Contribution of US Demand Response Coordination
  Committee has the potential to be very
  significant
• Combination of utilities and key market actors in
  the U.S.
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• CONTACT
• Daniel M. Violette
• Principal, Strategy Practice
• Summit Blue Consulting
• 1722 14th Street
• Boulder, Colorado 80302
• Phone [phone]
• E-Mail dviolette_at_summitblue.com