1 / 21

2004 ISO-NE Demand Response Program Evaluation Results

Presented at DRWG January 5, 2005 By Neenan Associates. 2004 ISO-NE Demand Response Program Evaluation Results. Overview. Program Participation Asset and Enrolled Migration Trends Program Benefits and Performance Benefits Metric Methodology Modeling Short-Run Supply Curves

steve
Download Presentation

2004 ISO-NE Demand Response Program Evaluation Results

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Presented at DRWG January 5, 2005 By Neenan Associates 2004 ISO-NE Demand Response Program Evaluation Results

  2. Overview • Program Participation • Asset and Enrolled • Migration Trends • Program Benefits and Performance • Benefits Metric Methodology • Modeling Short-Run Supply Curves • ISO-NE Market Prices • Benefits Metric Estimates • Recommendations

  3. ISO-NE DR Program Participation (Aug. 2003 vs Aug.2004)Program Statistics Notes: Action 9 - This 30-minute notice program is activated at Action 9 of ISO-NE Operating Procedure No. 4 Action 12 - This 30-minute notice program is activated at Action 12 of ISO-NE Operating Procedure No. 4. Those resources whose operation is limited, such as emergency engines, generally can operate following the implementation of OP-4 Action 12. ISO-NE Operating Procedure No. 4 (OP-4) defines the actions taken during a capacity deficiency. It is implemented initially to maintain operating reserves, and before initiating Action 11, ISO-NE will allowthe 30-minute operating reserve to reduce to zero.

  4. ISO-NE DR Program Participation (All Zones) Participation Changes 2003 - 2004

  5. Benefits Analysis

  6. Estimating Benefits: Short-Term Bill Savings Price • Reduction in LMP causes a short-term transfer from Gens to LSEs as the cost to purchase electricity in RTM is reduced (Assume 11% load transacted in RTM) Equilibrium w/o DR P2 2 Bill Savings 4 Equilibrium w/ DR 1 P1 DR Payments 3 Supply DR Load RT Load

  7. Estimating Benefits: Long-Term Hedge Savings • Reduction in LMP due to DR also has a downward influence on long-run average prices • If those who demand hedge contracts (60% of RTM Load) assume these reductions in price will be maintained in the long-run, they will demand hedge contracts that incorporate this lower price expectation • This amounts to a “long-run” transfer from producers to consumers as the money that would have gone to producers (Gens) inures back to consumers (LSEs)

  8. Price Responsiveness in Wholesale Markets • Demand response is an important component in mitigating market power and reducing price volatility • Commodity rates promulgated by LDC’s can harness price-responsive behavior • Critical Peak Pricing (CPP) • Real-Time Pricing (RTP) • Price-Cap Load Bid (PCLB) • Time-of-Use (TOU) • Customers respond to the commodity price resulting in load curtailments without any associated payments

  9. Transfer Benefits: A Valid Measure of Program Success • Few NE states have implemented such time-varying rates requiring the ISO to promulgate its own DR programs that pay for performance • Consequently, the performance of the RTPR program is properly judged based on the combined bill and hedge savings it provides relative to the costs necessary to achieve curtailments • Total benefits are a proxy for the benefits of lower price volatility

  10. Modeling Short-Term Electricity Market Supply Curves

  11. Supply Model Specification

  12. ISO-NE RTPR Event LMPs Fall 2003

  13. ISO-NE RTPR Event LMPs Winter 2004

  14. ISO-NE RTPR Event LMPs Spring 2004

  15. ISO-NE RTPR Event LMPs Summer 2004

  16. Event Hours and Average Performance by Zone and Season • Most event hours were called in Jan. ’04 due to cold snap • Winter months had most number of declared events and most performance

  17. RTPR Event Effects on Load and LMP by Season • On average, RTPR events declared when RTM LMP below $100/MWh • Such periods generally correspond with shallowly sloped supply curves • Lack of steep slope results in small changes to price when load is curtailed • Price Flexibility = % Change in Price due to a 1% Change in Load

  18. RTPR Program Impacts • Bill Savings small during periods when supply curve is not steep • Hedge Savings large due to sizable amount of load covered through bilateral contracts • Total Savings exceed Payments by over 4 to 1

  19. RTPR Event Price Statistics • On average, less than one-quarter of event hours had LMPs in excess of $100/MWh • By reducing the number of hours where LMP is less than threshold price, impact ratio could be made even better

  20. Recommendations • Improve the accuracy of the RTPR event triggering mechanism • Require more than one hour within the event window to exceed the price threshold when triggering an RTPR event • Reduce the number of hours within the event window • Restructure window to be 12 Noon – 7 p.m. • Customize window on an event-by-event basis

  21. Objectives • Minimize the number of event hours where the Real-Time LMP is less than $100/MWh • Provide customers with a reasonable notification period • Provide customers with a reasonable minimum event duration • Minimize software modifications • Minimize complicated manual processes

More Related