dsr: being power responsive, 18th june - full slidepack
TRANSCRIPT
Demand Side Response
Conference
Being Power Responsive
18th June
London
Agenda
Opening Address Steve Holliday, National Grid
Session 1: Electricity Demand Side Markets Today
Chair: Professor Dieter Helm CBE, University of Oxford
Speakers:
David Capper, DECC
John Pettigrew, National Grid
Gab Barbaro, British Gas
Martin Wilcox, UK Power Networks
Coffee break
Session 2: Opportunities for Your Business
Chair: Professor Jim Skea CBE, Imperial College, London
Speakers:
Maxine Frerk, Ofgem
Paul Crewe, J Sainsbury plc
Dr Alastair Martin, Flexitricity
Neil Gillespie, United Utilities
13:00 Lunch
Agenda
14:00 Session 3: Incentives & Barriers for Businesses
Roundtable Chairs:
Judith Ward, Sustainability First
Eddie Proffitt, Major Energy Users
Council
Dan Roberts, Frontier Economics
Tea break
Session 4: Delivering Flexibility at Scale
Chair: Cordi O’Hara, National Grid
Interview panel:
Sara Vaughan, E.ON UK
John Barnett, Northern Power Grid
Maxine Frerk, Ofgem
Duncan Burt, National Grid
Closing Address John Pettigrew, National Grid
16:45 to 18:30 Networking Drinks Reception
Session 1:
Electricity Demand Side Markets Today
David Capper
Deputy Director &
Head of Future
Electricity Networks
Electricity system capacity is driven by peak
demand
0
10
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30
40
50
60
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Non dom. demand
Total Demand
Projected increase in peak electricity demand from
increasing electrification of heat and transport
(EA Technology 2012)
24hr business day demand profile
(DDM reference case)
Domestic demand
Demand – GW Peak Demand – GW
120
100
80
60
40
120
0
2012
2030
2050
Cumulative Total
Assumed base load
(load growth and
energy efficiency)
Heat Pump Load
EV Load
DSR: a perspective from Government
Can we reduce the costs of a conventional
response to this challenge?
Reduce the cost of our future low carbon energy system and
ensure the system remains stable so that customers’ bills are lower
and their supply is secure
Maximise the use
of low carbon,
inflexible
generation to get
value for money
Reduce the need
for conventional
generation,
including peaking
plant
Optimise short
term balancing of
the system
Defer or avoid
investment in
network
reinforcement
expenditure
DSR: a perspective from Government
There are alternatives which could balance
the system more efficiently…
Supply via
interconnector
Export of excess supply
via interconnector
Intermittent
renewable
generation
Excess electricity stored &
used when demand
exceeds supply Intermittent renewable
generation
Demand decrease
Interconnection
Energy
Efficiency
DSR and Storage
(i.e. Smart
Energy)
DSR: a perspective from Government
So how much DSR potential is there?
• Current DSR restricted to large industry & embedded
generation (c.2 GW) and Economy 7 tariffs (c. 2.4 GW)
• Study has estimated total technical potential of up to
c.18GW of shiftable load on a winter weekday evening,
increasing over time
• Report has assessed the technical potential for load shifting
in the commercial sector at 1.2 - 4.4GW
• Extrapolating from UK trials, the present domestic potential
could be in the region of 1.3 – 2.5 GW
• Longer term potential likely to be higher
DSR: a perspective from Government
DSR in the Capacity Market
• Capacity market aims to deliver:
• Security of electricity supply
• Cost-effectiveness
• Specific features for DSR participation
• Transitional arrangements
DSR: a perspective from Government
DECC has launched Phase II pf the EDR Pilot
• £6million available to projects which improve energy efficiency at
peak times
• Wide range of projects eligible to take part, including replacement
of old pumps, motors, refrigerators and light fittings with new high
efficiency equivalents
• Improvements made from Phase I
• Register by 3 September and submit your full application by 15
October 2015. The auction will take place in January 2016
• Guidance, forms and information about workshops and other
events can be found on
www.gov.uk/electricity-demand-reduction-pilot
Electricity Demand Reduction Pilot
DSR: a perspective from Government
John Pettigrew
UK Executive Director
National Grid
Commercial and Domestic Customers
Electricity Distribution
Networks
National Grid Gas
Distribution UK
Other Gas Distribution
Networks
National Grid Transmission UK (Electricity & Gas)
Electricity Generators
Gas Producers and Importers
Syst
em
Op
era
tor
Our Core Role in UK
Wind Installed Onshore & Offshore Capacity (MW)
Fossil Reduction in Generation Capacity (GW)
Solar Installed Capacity (MW)
Demand Weather Corrected Annual Electricity (TWh)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0 2008 2009 2010 2011 2012 2013 2014
2008 2009 2010 2011 2012 2013 2014
360
340
320
300
280 2008 2010 2012 2014
Changing Energy Landscape
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2009 2010
2011 2012 2013 2014
3
1
-1
-3
-5
-7
System Operation Changes
Replacement Energy Sources
Lower Minimum Demands
Future Supply & Capacity
Demand Side Response
Transmission Charging
EMR Delivery Body
Balancing Services
Industry Facilitation
Summary
Gab Barbaro
Managing Director,
British Gas Business
Services
Martin Wilcox
Head of Future Networks
2015. UK Power Networks. All rights reserved
Agenda
• Why UK Power Networks and other DNOs are exploring DSR
• Our experience – Low Carbon London
• Our view on the current markets
• Next steps in UK Power Networks’ engagement with the demand
side
2015. UK Power Networks. All rights reserved
Why are we considering DSR?
0
500
1,000
1,500
2,000
2,500
3,000
+ HIGH HEAT PUMP UPTAKE
+ HIGH ELECTRIC VECHICLE UPTAKE
+ HIGH RESIDENTIAL SOLAR UPTAKE
UKPN CORE
SCENARIO: £1545m
Co
st o
f re
info
rcem
en
t,
incl
ud
ing
Smar
t (£
m)
Source: UK Power Networks analysis using the Transform model
configured for its own licence areas
2015. UK Power Networks. All rights reserved
Why are we considering DSR?
Smart solutions can help manage future networks peaks
Source: Forecast household demands in 2025 taken from P. Djapic, M. Kairudeen, M. Aunedi,
J. Dragovic, D. Papadaskalopoulos, I. Konstantelos, G. Strbac, “Design and real-time control of
smart distribution networks”, Low Carbon London Report D3, Imperial College London, 2014.
Business as Usual Smart
Time of day Time of day
Div
ers
ifie
d d
em
an
d p
er
ho
us
eh
old
(k
W)
Div
ers
ifie
d d
em
an
d p
er
ho
us
eh
old
(k
W)
Baseline Appliances Electric Vehicles Heat pumps
2015. UK Power Networks. All rights reserved
Attractiveness of DSR to address the
challenges
• Established contractual arrangements led historically by the GB
System Operator (National Grid)
• It re-utilises standby generation assets
• Leverages increasing sophistication in building controls and building
automation
• In the case of some I&C customers, DNOs currently retain some
direct interaction with them
We started our initiative “Low Carbon London” in 2011 to trial I&C and residential DSR at scale and build confidence of this service
2015. UK Power Networks. All rights reserved
Low Carbon London What did we trial?
£/M
w/h
r
£0
£20
£40
£60
£80
£100
£120
0 1 2 3 4 5 6
Trial Period
Low Carbon London DSR Trials
Winter 2012-13 Summer 2013 Winter 2013-14 Winter 2014-15 Summer 2012 Winter 2011-12
Size
6MW Site
200kW Site
Diesel
CHP
Load Reduction
Gas
Type
Source: Analysis of Low Carbon London trial data
Availa
bili
ty P
aym
ent
(£ /
MW
/ h
r)
2015. UK Power Networks. All rights reserved
Case study: the use of I&C DSR
• Reliability: Out of 185 unique events called during our Low Carbon London
trials, only 19 events received a null response
• Shifting peaks: Payback after achieving load reduction is not as large as
the reduction itself
• Procurement: there is a need to account for availability risk
• Technology F-factors
𝐷𝑆𝑅 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑏𝑒 𝑃𝑟𝑜𝑐𝑢𝑟𝑒𝑑 [𝑀𝑊] = 𝐷𝑆𝑅 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑀𝑒𝑒𝑡 𝐸𝑛𝑒𝑟𝑔𝑦 𝑎𝑡 𝑅𝑖𝑠𝑘 [𝑀𝑊]
𝐹 𝐹𝑎𝑐𝑡𝑜𝑟 [%]
Number of DSR facilities
DSR technology type 1 2… 5… 9 10
Diesel 70% 72% 78% 80% 81%
Demand Reduction 54% 58% 62% 63% 64%
2015. UK Power Networks. All rights reserved
What is our view of the current market?
• The use of DSR by DNOs, and residential DSR in general, are still in their
early stages
• DNO use of DSR
– I&C DSR contracted by DNOs require process and procedures for mass
roll out;
– However, I&C DSR can have real benefits for DNOs:
– Addressing network constraint issues
– Deferring and/or avoiding network investment
– Supporting difficult construction outages
• Residential DSR (excluding Economy 7) is not yet attractive to DNOs
– Residential customers do indeed respond to price signals
– However, it must be linked to other value propositions from suppliers and
the GB System Operator in order to provide a net saving
2015. UK Power Networks. All rights reserved
Unlocking DSR Next Steps for UK Power Networks
• ED1 Business Plan:
– £3.3m budget provisioned in our submission to Ofgem for DSR
• Based on a high utilisation price
• Based on an availability price in excess of National Grid’s given that we
operate in a niche market
– Expected total 64MW of DSR
– Allocated to 20 schemes which are under review thoughout the period as
load growth develops
• DSR aggregators and suppliers engagement was held in Q1 2015 to inform
our strategy
• Market engagement will follow in Q3 2015 following our annual load growth
review
Session 2:
Opportunities for Your Business
•
Maxine Frerk
Interim Senior Partner for
Smarter Grids &
Governance
• GB has seen a growth in intermittent generation.
• Flexibility is now important at both the peaks and at times of low demand. The demand side can play an important role in providing this.
The GB energy system is changing …
Price peaks
And this is being reflected in prices …
0
50
100
150
200
250
300
00:00 04:00 08:00 12:00 16:00 20:00
Intraday Prices - 17th October 2014 (£/MWh)
Negative prices
And this is being reflected in prices …
-20
-10
0
10
20
30
40
50
Apr May Jun
Daily Min. Intraday Price (half-hourly), Q2 2014 vs. Q2 2015 (£/MWh)
2014
2015
Balancing.
The SO uses flexibility for reserve and frequency purposes. And suppliers and generators want to manage cash-out risks
Flexibility across the value chain
Capacity.
The system needs to have enough capacity to ensure security of supply at any time of the day
Networks.
Flexibility can enable the deferral or avoidance of network investments, and support the management of faults
Flexibility is an essential feature of energy markets
29,800
30,000
30,200
30,400
30,600
30,800
31,000
31,200
31,400
31,600
31,800
15:00 14:00 16:00 17:00 18:00 19:00
Typical day
Men’s Final
Wimbledon Men’s Final Murray vs Djokovic, 7 July 2013
Match begins
End of 2nd set
Murray breaks for match drop
End of broadcast
Murray wins
End of 1st set
How flexibility can help
Demand
Time
Demand
Time
Demand
Time
Demand
Time
Demand
Time
Time-shift load
Time-critical reduction
‘Smooth’ general load
shape
A net load turn-down
Load turn-up
Source: Adapted from ENA & Energy UK. Discussion paper on Demand Response. 2012.
There are some ways in which demand can already provide flexibility ….
National Grid Demand
Balancing Services
- STOR (Short –Term Operating Reserve) - Fast Reserve - Frequency Response
Cost Avoidance
- Triad - General demand reduction/ participation in wholesale market
Aggregators
Act as intermediaries between I&C customers & National Grid/ electricity market
And more are on the way ….
• Demand Side Balancing Reserve (DSBR)
• Capacity Market Participation
• DNO – assistance with constraint management
Ofgem’s work on flexibility
• Identifying the barriers to provision and uptake
•Looking to capture value of DSR across the value chain :
- “Stack” of benefits
- Coordination important
•Recognise complexity a challenge for I & C customers not core business:
- Building understanding
- Need for tailored contracts
- Role of aggregators?
•Storage prices falling – need clarity over the regulatory position
•See non-domestic as where the immediate opportunity lies for DSR
Summary
• The GB electricity market is changing and price volatility is increasing, incentivising more flexibility.
• Ofgem has sharpened these price signals to reward flexibility through our EBSCR reform, half-hourly settlement.
• Ofgem working to remove barriers and facilitate flexibility.
• DSR already plays an important role in providing flexibility, and has the potential to develop further in the future.
We are keen to hear from DSR providers on how we can facilitate their participation in the market.
Session 4:
Delivering Flexibility at Scale
Delivering Flexibility at Scale
Education and engagement
• Simplification of information
• Clarity of value proposition
• More promotion of opportunities
• Greater understanding of schemes
Customer led products
• Clear packages for customers
• Examine product specification
• Longer term product opportunities
• Flexibility of product design
Certainty and stability
• Investigate longer term incentives
• Address longevity problem
• Elimination of uncertainties
Coordinated approach
• Use collaborative pilots
• Customer focussed forums
• Collectively agreed targets for DSR
Demand Side Response
Conference
Being Power Responsive