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Demand Response in Wholesale and Retail Markets:

Demand Response in Wholesale and Retail Markets:. Where are we headed?. Michael Hogan Senior Advisor. October 16, 2013. M arkets: where are we headed?. Wholesale markets: renewables integration

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Demand Response in Wholesale and Retail Markets:

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  1. Demand Response in Wholesale and Retail Markets: Where are we headed? Michael Hogan Senior Advisor October 16, 2013

  2. Markets: where are we headed? • Wholesale markets: renewables integration • DR as flexible resource: capacity markets, services markets, dispatchability, scarcity pricing in energy and services markets • DR as daily resource: DR + end-use energy storage, • “Due discrimination”: FERC Order 1000, tiered auctions, capabilities, public policy

  3. Growth of PV in CAISO

  4. Increased demand flexibility through ‘smart’ grid investments is a cost-effective alternative to curtailing low-carbon sources

  5. Impact of improved scarcity pricing (ERCOT) Source: Potomac Economics, “ERCOT 2012 State of the Market Report”, June 2013

  6. Markets: where are we headed? • Retail markets: multiple challenges, multiple opportunities • Integration of distributed generation on distribution system • Facilitation of “DR + end-use energy storage” as a wholesale system resource: wires charges, distribution system impacts • Customer value proposition: dynamic pricing vs. payment for services, automation, equity

  7. Denmark: a snapshot of the future?

  8. Where the rubber meets the road…. Source: Gunnar Lorenz, Eurelectric

  9. Markets: where are we headed? • Wholesale vs. retail markets: • Competition between TSOs and DSOs for DR services • Who is willing to pay, how much, and in what form? Market access for 3rd party providers • Cooperation across the largest feasible geographic footprint – argues for giving the lead to TSOs, establishing a protocol with member DSOs

  10. Coordination will be key to unlocking critical flexibility Source: Gunnar Lorenz, Eurelectric

  11. Responsive demand – in both directions - is a cost-effective solution to both curtailment and excessive price volatility End-use energy storage is feasible, low-cost and widely available

  12. Michael Hogan, Senior Advisor mhogan@raponline.org (603) 738 8652 (mobile)

  13. The forward value of flexible resources Source: Energy Futures Laboratory, Imperial College London

  14. Cost per Unit of Performance for Various Energy Storage Options 10000 H.P. capacitors H.P. flywheels Distributed/demand-side Li-ion L.D. flywheels Ni-Cd EV 1000 Battery Na-S Zinc-air Lead-acid Grid-scale Capital cost per unit energy - $/kWh output Flow Flywheel/capacitor L.D. capacitors 100 PSH Thermal CAES Metal-air H2O heaters 10 3000 300 10000 1000 100 Capital cost per unit power - $/kW Sources: Electricity Storage Association, EPRI, Sandia National Laboratories, Ecofys

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