naesb wholesale demand response standards 1/14/09 naesb wholesale electric demand response...

NAESB Wholesale Demand Response Standards 1/14/09

NAESB Wholesale Electric Demand Response Measurement & Verification Standards

Eric Winkler, Ph.D., ISO-New EnglandDonna Pratt, New York ISOPaul Wattles, ERCOTJanuary 14, 2009

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Wholesale Demand Response Standards Overview


Goals/Guidelines

• Consolidate standards for existing and proposed Demand Response (DR) products and Performance Evaluation methodologies

• Define Common Terms• Ensure compliance with tariffs, market rules, operating

procedures, protocols and manuals• Collaborate with ISO/RTOs, IRC, Retail Leadership and

NAESB Stakeholders


Standards Approach

Measurement and Verification (M&V) standards are intended to facilitate Demand Response in wholesale electricity markets by providing a common framework for:

Transparency

Accessible and understandable M&V requirements for Demand Response products

Accountability

Criteria that will enable the System Operator to accurately measure performance of Demand Response resources

Consistency

Standards applicable across wholesale electricity markets


Standards Applicability

• These standards do not establish requirements related to the compensation, design, operation, or use of Demand Response services

• System Operators are not required to offer these Services and may not currently offer each of these Services

• For purposes of these wholesale M&V standards, Demand Response does not include M&V of energy efficiency or permanent Load reduction


Standards Scope and Impact

• Scope Limitation• Proposal is limited to M&V aspects of DR products

• No product eligibility characteristics or other participation features are defined in these standards

• Impact on Existing Products• All current ISO/RTO demand response products are consistent

with the proposed standards

• Local differences may be covered under clauses such as “System Operator shall specify” or “unless otherwise specified by the System Operator”, so long as transparency requirements are met


Tariff & NERC Standards Conflicts

• System Operator’s Tariffs, market rules, operating procedures, protocols or manuals have precedence in the event of any conflict.

• Terms defined in the Definition of Terms section are critical to understanding the applicability of these M&V standards, but do not modify or supersede market rule or tariff definitions that apply to the compensation, design, operation, or use of Demand Response services.

• All entities supplying Demand Response Services shall comply with NERC reliability standards.


Consistency w/ NERC Interest in Demand Side Management

Demand-Side Management

Demand Response

Energy Efficiency

Dispatchable Non-Dispatchable

Reliability Economic

Capacity Ancillary Energy-Voluntary Energy-Price

Time-Sensitive Pricing

Direct Load ControlInterruptible Demand

Critical Peak Pricing (CPP) with controlLoad as a Capacity

Resource

Spinning ReservesNon-Spin Reserves

Regulation

Emergency Demand Bidding & Buy-Back

Time-of-Use (TOU)

Critical Peak Pricing (CPP)

Real Time Pricing (RTP)

System Peak Response Transmission Tariff


Wholesale Demand Response Standards Structure and Content

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Definitions of Terms

• Definition of Terms was developed to clarify specific meanings of terms while providing consistency and conformance to:– ISO/RTO Standard Reference– FERC– NERC

• Terms Areas– Demand Response Event Timing– General Terms


Demand Response Event Timing


General Terms

* Product Types, ‡ Performance Methodologies, # Key Terms


Demand Response Products

• Energy Service– A type of Demand Response service in which Demand Resources are compensated based

solely on Demand reduction performance.

• Capacity Service– A type of Demand Response service in which Demand Resources are obligated over a

defined period of time to be available to provide Demand Response upon deployment by the System Operator.

• Reserve Service– A type of Demand Response service in which Demand Resources are obligated to be

available to provide Demand reduction upon deployment by the System Operator, based on reserve capacity requirements that are established to meet applicable reliability standards.

• Regulation Service– A type of Demand Response service in which a Demand Resource increases and decreases

Load in response to real-time signals from the System Operator. Demand Resources providing Regulation Service are subject to dispatch continuously during a commitment period. Provision of Regulation Service does not correlate to Demand Response Event timelines, deadlines and durations.


Product Standards Overview

GeneralGeneral

• Advance Notification

• Deployment Time

• Reduction Deadline

• Release/Recall

• Normal Operations

• Demand Resource Availability Measurement

• Aggregation

• Transparency of Requirements

After-the-Fact-After-the-Fact-MeteringMetering

• After-the-Fact Metering Requirement

• Meter Accuracy

• Details of Meter/Equipment Standards

• Meter Data Reporting Deadline

• Meter Data Reporting Interval

• Clock/Time Accuracy

• Validating, Editing & Estimating (VEE) Method

• On-Site Generation Meter Requirement

TelemetryTelemetry

• Telemetry Requirement

• Telemetry Accuracy

• Telemetry Reporting Interval

• Other Telemetry Measurements

• Communication Protocol

• Governor Control Equipment

• On-Site Generation Telemetry Requirement

Performance Performance EvaluationEvaluation

• Rules for Performance Evaluation


Performance Evaluation

A performance evaluation methodology is used to determine the Demand Reduction Value provided by a Demand Resource. The standards include descriptions of acceptable Baselines and alternative performance measurements.– Maximum Base Load

– Meter Before / Meter After

– Baseline Type-I

– Baseline Type-II

– Metering Generator Output


Evaluation Methodologies

• Maximum Base Load– A performance evaluation methodology based solely on a Demand

Resource’s ability to reduce to a specific level of electricity consumption or demand, regardless of its electricity consumption or demand at Deployment.

• Meter Before / Meter After– Metering Before Deployment vs. Metering After Reduction Deadline is a

performance evaluation methodology where electricity consumption or demand over a prescribed period of time prior to Deployment is compared to similar readings during the Sustained Response Period.


Evaluation Methodologies

• Baseline Type 1 (Interval Metered)– A Baseline model based on a Demand Resource’s historical interval

meter data which may also include but is not limited to other variables such as weather and calendar data.

• Baseline Type 2 (Non-interval Metered)– A Baseline model that uses statistical sampling to estimate the electricity

consumption of an Aggregated Demand Resource where interval metering is not available on the entire population.

• Behind-The-Meter Generation– A performance evaluation methodology, used when a generation asset is

located behind the Demand Resource’s revenue meter, in which the Demand Reduction Value is based on the output of the generation asset.


Evaluation Standards Overview

Baseline Baseline InformationInformation

• Baseline Window

• Calculation Type

• Sampling Precision and Accuracy

• Exclusion Rules

• Baseline Adjustments

• Adjustment Window

Special Special ProcessingProcessing

• Highly-Variable Load Logic

• On-Site Generation Requirements

Event Event InformationInformation

• Use of Real-Time Telemetry

• Use of After-the-Fact Metering

• Performance Window

• Measurement Type


Performance Evaluation Criteria

• Rules for Performance Evaluation– Applicable Performance Evaluation methodologies

Performance

Evaluation Type

Service Type

Energy Capacity Reserves Regulation

Maximum Base Load Meter Before / Meter After Baseline Type-I Baseline Type-II Metering Generator Output


Wholesale DR Standards Informal Comment Overview

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Informal Comments

• October 2nd ISO/RTO work group presentation of recommendation

• October 6th – October 22nd Informal Comment period open to all interested parties regardless of membership status.

• October 24th NAESB posts informal comments to website.• November 4th NAESB compiled comments received by

ISO/RTO.• November 25th ISO/RTO work group submits reply comments

and revised Recommendation.• December 2nd DSM-EE Subcommittee meeting considers

comments and revised Recommendation.

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Informal Comment Responders

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American Electric Power Service CorporationArizona Public ServiceBGEConEdisonE on U.S.Efficiency Valuation OrganizationELCONEnerNOCEPRIIRC – Standards Review Committee Kansas City Power and LightNational Rural Electric Cooperative AssociationPortland General ElectricSouthern Company TVA


Informal Comment Categories

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• Baseline representation• Concern over the amount of flexibility given to the System Operator• Concern regarding the standards’ effect on retail• Definitions• Flexibility is Important in the Standards• General Comments• Greater Clarity• Request for Examples• Specific Comments on the Standards• Standards Clarification• Suggested Additions to the Standards• Suggested Deletions• Suggested Rewording• Support• The application of the standards on negotiated contracts• The draft is a framework, not standards


Informal Comment Details

• 90 Comments from 14 responders• 90 Responses provided in late comments from ISO/RTO • 18 Agreeing responses with no changes recommended• 8 Agreeing responses with language changes• 8 Clarifying responses with no changes recommended• 37 Disagreeing responses with no changes

recommended• 19 Responses indicating no clear action may be taken

based on comment

• 180 Revisions to Recommendation

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CategoryAgree no change

Agree language change

Clarify no change

Disagree no change

Unclear no change

Grand Total

Baseline representation 1 1

Concern over amount of flexibility given to the System Operator

3 2 5 10

Definitions 2 2

Flexibility is Important in the Standards 1 1

General Comments 4 2 6

Greater Clarity 1 7 3 7 5 23

Request for Examples 2 3 5

Specific Comments on the Standards 3 1 4 10 1 19

Standard Clarification 2 1 3

Suggested Additions to the Standards 1 4 3 8

Suggested Rewording 1 1

Support 5 5

The application of the standards on negotiated contracts

1 1

The draft is a framework, not standards 3 2 5

Grand Total 18 8 8 37 19 90



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CompanyAgree no change

Agree language change

Clarify no change

Disagree no change

Unclear no change

Grand Total

American Electric Power Service Corporation

1 3 2 6

Arizona Public Service 1 1 2

BGE 2 1 3 3 1 10

ConEdison 3 5 8

E on U.S. 1 4 2 7

Efficiency Valuation Organization 4 4

ELCON 2 1 4 1 8

EnerNOC 4 4

EPRI 5 2 7

Entergy 2 4 8 1 15

Kansas City Power and Light 1 1

National Rural Electric Cooperative Association

2 3 1 6

Portland General Electric 1 1

Southern Company 2 1 1 4 8

TVA 1 1 1 3

Grand Total 18 10 6 36 20 90


Response Highlights

Request for Examples– Comments asking for application of the standards to existing or

proposed programs.– Concern: Want to be careful not to imply a higher degree of

technical specificity at this time. – Response: “A working document supporting the responder’s

request for clarity from an example is to be provided.”– Implications: Additional work needs to be done by ISO/RTO

group to generate examples of application of the standards to existing standards.

– NYISO DR Regulation program tentatively identified as possible example program.

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Response Highlights

All Categories– Comments that were positive or negative that did not contain a

suggested change.– Concern: No action can be taken as a result of the comment

without specificity. – Response (Positive): Agree– Response (Negative/Neutral): “The responder is free to submit a

request with enough specificity to generate a change to the recommendation. The request could be considered now or may be addressed once the standards are approved.”

– Implications: Potential work for ISO/RTO if a specific comment comes in during formal comment period.

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Response Highlights

• Framework Versus Standards– Comments raised regarding the lack of specificity in Standards.

– Concern: Specific approach by ISO/RTO was to find common ground versus develop detailed technical standards. Specific reference to the term Framework on Performance Evaluation led to comments suggesting overall standards were a framework. However, the term “framework” implies program design which is not the intent.

– Response (General): Commonality in technical requirements does not preclude a minimum set of standards that may be unique to product application but common to product type. Standards require transparency and thereby affect the product use and uniformity.

– Implications: ISO/RTO may be requested to develop technical standards in the future.

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Response Highlights

• Requests for greater clarity– Comments addressing numerous areas requiring greater clarity,

additional specifications, disagreement on standards practices

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Recommendation Changes

• Enhanced definition of Regulation Service• Modified language of Tariff Conflict and NERC Standards• Modified Telemetry terminology and Standards• Added clarifying language to Demand Response Event Definition• Refined After-the-Fact Metering Performance Measurement

terminology• Refined Applicability• Refined Aggregation Standard• Refined Meter Accuracy Standard• Addition of exclusion rules under Baseline Type-I & II• Added applicability of Maximum Base Load to Reserve Service• Corrected consistency of active/passive voice usage

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Recent DSM/EE Sub Committee Activity

• December 2, 2008 – The group met in Birmingham hosted by Alabama Power to review comments and vote on the recommendation for Wholesale Electric Quadrant standards for M&V characteristics for DR products and services. After considerable discussion, and several votes to amend the recommendation the recommendation with the amendments put forward by the ISOs and RTOs and three separate amendments addressing titling, applicability, and additional specificity for the definition of Baseline, the motion to adopt the revised recommendation was approved with significant support with 86.5 percent approval by balanced vote. All WEQ segments were present and voting. The revised recommendation will go out for a thirty day comment period and is now considered a work product of the WEQ EC. The abbreviated update report was given for the Retail market effort. The Retail group plans to use the WEQ revised recommendation as a foundation for their work.

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“Business Practices for a Framework for Measurement & Verification of Wholesale Electricity Demand Response”

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Change to Title of Standards


Change to Applicability

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Change to Baseline Definition

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QUESTIONS

naesb wholesale demand response standards 1/14/09 naesb wholesale electric demand response...

Documents

wholesale mv standards

standards scope

standards impact

standards applicability

verification mv standards

nerc reliability standards

standards approach measurement

naesb stakeholders slide