Customer Services and the Changing
Needs of the CA Electricity Grid
Stanford University
May 5, 2015
Agenda
• Overview of DR
• CA Energy Policy
• DR in CA
• Other Markets
• System Needs
• Regional Resource Sharing?
• Questions
2
About EnerNOCEnergy Intelligence Software
3
EnerNOC’s North American Demand Response Footprint
Alberta, Canada
Alberta Electric System
Operator (AESO)
Utah and Idaho
Pacificorp
Indiana, Michigan
AEP I&M
Idaho
Idaho Power Company
New York
Consolidated Edison
New York ISO
Kansas
Midwest Energy
Mid-Atlantic, Virginia,
West Virginia, North
Carolina, Ohio, Illinois,
Indiana, Michigan
PJM Interconnection
Oregon
Portland General Electric
(PGE)
California
Pacific Gas and
Electric (PG&E)
Southern California
Edison (SCE)
Kentucky, Tennessee,
Georgia, Alabama,
Mississippi
Tennessee Valley
Authority (TVA)
Louisville Gas & Electric
and Kentucky Utilities
(LG&E and KU)
Arizona
Tucson Electric Power
Colorado
Xcel Energy
4
New Mexico
Public Service
Company of New
Mexico (PNM)
Texas
Electric
Reliability
Council of
Texas (ERCOT)
Florida
Tampa Electric Company
(TECO)
EnerNOC Acquisitions
Energy Intelligence Software and International Growth
Commercial Customer
Engagement
Pulse Energy
Entelios AG
International Demand
Response
Activation Energy
Entech USB
Energy Procurement
& Management
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World Energy
Solutions
A Global Demand Response Footprint
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Global Capability
• We meet you where you operate – in 104 countries
Countries Covered
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Streaming data from over
14,000 enterprise sites
Supporting 15
languages
Global offices in
12 countries
Managing one million
bills annually
Worldwide currencies
and measurements
Comprehensive Utility EIS Solutions
A single platform to serve all C&I customers, large and small, with 50+ utility partners
globally
Customer Engagement
 Engage customers through
customized, timely, and
valuable content
Demand Response
Energy Efficiency
 Provide actionable insights
delivered to customers and
improved energy efficiency
program adoption
 Transform customers into a
virtual power plant; create
value added services and a
tool for traders
Operational Effectiveness and Customer Management
 Targeted program design, smarter marketing, seamless customer service
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About EnerNOC
Strong Financial Profile
• 2014 Revenues: $472M
• 2014 Adjusted EBITDA: $76.4M
• $246M in cash/cash equivalents on
balance sheet
• Publicly traded on the NASDAQ)
(ENOC)
• Over 1,000 employees and growing
fast; multiple “top places to work”
awards
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Updated 2 2015
Full Value and Technology
Offering
Proven Customer Track
Record
• Energy intelligence software = ~$5B
market in U.S. alone
• Thousands of enterprise
customers across over 35,000
sites
• $1B in customer savings
delivered to date
• Market leader in demand
response
• Energy intelligence application
platform addresses demand and
supply-side, connects energy usage
to currency
• Combines technology, managed
services, and market access
• ~$200M invested to date in
technology
To learn more, visit http://www.enernoc.com
Proprietary and Confidential
CA Energy Policy
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IEPR
LTPP
FERC
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CA EPA
CARB
CAISO
NOW: Governor & Legislature
• Governor issues Executive Order to achieve GHG emissions reductions equal
to 40% below 1990 levels by 2030. (April 2015)
• Governor describes energy policy vision in inaugural address (January 2015)
• Increase electricity generation from renewable sources by 50% by 2030.
• Increase energy efficiency in existing commercial building by 50% by 2030.
• Decrease petroleum use in the transportation sector by 50% by 2030.
• SB 350 (De Leon)-codifies the Governor’s Inaugural Goals.
• SB 32 (Pavley)-directs CARB to establish new GHG emissions reduction
targets for 2030 and 2040.
• SB 286 (Hertzberg)-lifts direct access suspension by 1/3 over 3 years with
increased RPS requirement.
• AB 793 (Quirk)-incentivizes energy management technology adoption for
residential and business customers.
• AB 1330 (Bloom)-establishes an EE and DR procurement standard.
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Proprietary and Confidential
Main Drivers for Energy Policy
• Greenhouse Gas Emissions Reductions
• Renewable Resources
• EE & DR
• Electrification of the transportation sector
• Increased penetration of distributed energy resources
• Increased Customer Participation
• AMI
• Data Access/Privacy
• Reliability
• Meeting changing system needs (ramping)
• Better integration of resources
• SONGS replacement
• Water/Energy Nexus
• Drought
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Proprietary and Confidential
DR in CA
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Demand Response and Energy Efficiency
• Long History of EE and DR programs
• Joint Energy Agencies’ Energy Action Plan (2003, 2005, 2008)
• Establishes a loading order or preferred resources
• EE and DR, Renewable Resources and Distributed Generation
• Third party programs promoted in 2007
• Legislation requires electrical corporation to procure all “cost-effective, feasible and
reliable DR and EE.
• DR and EE planning has happened outside of other procurement planning
• Until SONGS closure and SCE LCR RFO (2014)
• Commission adopts a policy to “bifurcate” DR (2014)
• Supply-Side Resource
• Load Modifying Resource
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Proprietary and Confidential
Import of Being Either a SS or LMR DR Resource
• SS DR RECOGNIZED AS A RESOURCE BY CAISO FOR PLANNING
PURPOSES
• LOAD MODIFYING RESOURCES WILL ADJUST THE DEMAND FORECAST
• NOT CLEAR HOW ALL OF THE VALUE OF A LOAD MODIFYING
RESOURCE WILL BE RECOGNIZED
• If adjust actual monthly or annual peak
• Hard triggers
• Not clear if supply-side resources will have a premium over LMRs
• Not clear how flexible capabilities will be recognized
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Proprietary and Confidential
Supply-Side DR
• Participate in CAISO’s energy and/or ancillary services market
• Meet resource adequacy for system and local reliability purposes (Reliability Services
Initiative)
• Approved by the Board of Governors
• Will be Submitted to FERC
• Meet flexible resource adequacy requirements (approved by FERC)
• Must-Offer Requirement in the day-ahead and/or real-time energy markets
• CPUC is testing a DR Auction Mechanism (DRAM)
• Third-party DRPs meet CAISO’s resource adequacy requirements in exchange for a
capacity payment
• Winning bidder must meet system RA requirements and Rule 24 requirements for
participating in the wholesale market with retail customers
• First auction held in late summer/early fall 2015; delivery in June-December 2016
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Proprietary and Confidential
SCE and PG&E Rule 24, SDG&E Rule 32
• IOU Tariff that establishes the responsibilities between the IOU/LSE and the
Demand Response Provider (DRP)
• Customer authorization for release of customer data
• Requirement that a DRP cannot register a customer to participate in the wholesale
market who is participating in a utility retail DR program
• Requirement for the DRP/IOU to sign an agreement to abide by Rule 24
• Requirement for the DRP to register with the CPUC
• Requirement for the DRP to follow consumer protections
• Requirement for the DRP to pay applicable charges to the IOU
• Requirement for the IOU to provide timely access to data for settlement purposes
• Requirement for the DRP to sign the CAISO/DRP Agreement, requiring the DRP to
abide by CAISO’s Tariff
• Requirement for the DRP to become or retain a scheduling coordinator for purposes of
bidding or scheduling into the CAISO’s energy and ancillary services market
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Proprietary and Confidential
Why Hasn’t DR Participated in the CAISO Before Now?
Controversy over FERC Order 745
DR= generation
LMP if provides net
benefit
CPUC Suspension
Rule 24 Developed
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• FERC Order 719 (2008)
• FERC Order 719-A (2009)
• FERC Order 745 (2011)
• FERC Order 745-A (2011)
• EPSA Challenge to DC Circuit
• DC Circuit overturns Order 745
Can prices drive the needed
response?
• Don’t chase ISO markets just because we can
• Look ahead to services we need going forward
•
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Eric Cutter, E3 Presentation 10/16/13 CPUC DR Rulemaking Workshop
Other Markets
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PJM Screen Shot for BGE Zone
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Proprietary and Confidential
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ISO-NE Screen Shot 7-22-11
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Proprietary and Confidential
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Proprietary and Confidential
System Needs
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Conventional resources will be dispatched to
the net load demand curve – High Load Case
Load, Wind & Solar Profiles – High Load Case
January 2020
46,000
10,000
6,300 MW
in 2 hours
44,000
8,000 MW
in 2 hours
42,000
13,500 MW
in 2 hours
9,000
8,000
7,000
38,000
36,000
6,000
34,000
5,000
32,000
4,000
30,000
28,000
3,000
26,000
2,000
24,000
1,000
22,000
20,000
0:00
1:30
3:00
4:30
6:00
7:30
9:00
Load
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10:30
12:00
Net Load
13:30
Wind
15:00
16:30
Solar
18:00
19:30
21:00
22:30
0
0:00
Wind & Solar (MW)
Load & Net Load (MW)
40,000
Advanced DR Scenario
Looking at the ability to increase and decrease load throughout the day.
Source: Investigating a Higher Renewables Portfolio Standard in California, Energy and Environmental Economics, Inc, January 2014, page 122
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CAISO Market Notice
• Market Notice
• April 30, 2015
•
•
• Categories
• Grid Operation
• Market Operations
•
•
• Notification of Ancillary Services Scarcity Event 4/21/15
•
•
• Summary
• Ancillary services scarcity pricing was triggered on April 21, 2015 in the 15-minute market run.
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Examples of Fast Response DR
Pilots for BPA, including
load-following projects
AutoDR demonstration for
commercial customers
AutoDR with a UFR that
responds to changes in
frequency in 0.2 second
Synchronized Reserves
Market requires 10-minute
response; many assets are
automated
Direct load control
programs with automation
for all customer classes
Funding available for
AutoDR technology to
accelerate growth in
existing DR programs
Many assets automated to
provide 10 min response;
qualifies at WECC nonspinning reserves
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DR program
implemented to
accelerate adoption of
existing DR tariff
AutoDR resource providing
ancillary services with <1 second
response time
Balancing Both Spikes and Dips in Demand
Case Study: Bonneville Power Administration (BPA) Wind Integration Pilot
Pilot Background
• Pace of wind power development in the Pacific
Northwest is exceeding BPA’s expectations
• BPA has 3,000 MW of wind interconnected today, with
6,000 MW of requests ‘in-process’ and another
15,000 MW of requests ‘in-discussion’
• Given that BPA has a total of 40,500 MW of capacity,
this is dramatic penetration for the region
Pilot Parameters
• Direct load control, although customer will have
manual override capability, as well as the ability to set
specific temperature boundaries
EnerNOC is helping BPA use aggregated C&I end-use loads to
providing a load following resource to mitigate the intermittency of
wind power
• Loads controlled both up and down
• 24/7/365 resource availability
• Dispatch upon 10 minutes notice
• Maximum 30 minutes per event and 2 events per day
• Minimum 3 hours between events
• Other event limitations may be employed, subject to
customer and utility needs
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Copyright 2013 - EnerNOC, Inc.
The need
DR as a grid-balancing ancillary service
European markets have unique requirements
• Increasing shares of fluctuating renewable energy resources create the need for flexible capacity to
balance the grid.
• Intelligent aggregation (pooling) of individual demand-side flexible assets provide this reliable source
of capacity.
European Transmission System
Operators (TSOs) increasingly
welcome the participation of DR
as a grid-balancing ancillary
service in their reserve programs
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Program types
Criteria for ancillary services
Amprion’s Secondary Reserve Program had originally been
designed for participation of generation assets.
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Regional Cooperation?
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EPA
• RICE NESHAP-allows BUGs for emergencies
•Overturned by DC Circuit
• MATS-Coal Retirements
•Challenged and upheld
• Clean Air Act Section 111(d)
•Final Rule Issued by June 30, 2015
•Compliance by June 30, 2016 (with ability to extend for
•one or two years)
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Studies on Operational Impacts of Renewable
Integration
• Flexible capacity is one of several operational changes that need to be
adopted to efficiently integrate renewable resources
• Expanded balancing area cooperation, including dynamic transfers
• Expand sub-hour dispatch and Intra-hour scheduling
• Improved forecasting of wind and solar
• Commit additional operating reserves
• Build or increase utilization of transmission
• Target new or existing DR to assist with variability
• “It is more cost-effective to have demand response address the 89
hours of contingency reserve shortfalls rather than increase spin for
8760 hours of the year. Demand response can save up to $600M/yr
($510M/yr in 2009$) in operating costs versus committing additional
spinning reserves.” NREL WWSIS at p. 22
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Benefits top $11m since start of ISO’s Energy Imbalance Market
ISO to add Puget Sound
Energy to the Energy
Imbalance Market PSE to
join ISO, PacifiCorp and
NV Energy to find mutual
savings for their
consumers
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APS: the Company believes that it is in the best
interests of customers to participate in the EIM.
CAP & TRADE
• California and Quebec sign agreement to integrate,
harmonize their cap-and-trade programs
• Is Ontario Next?
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Proprietary and Confidential
Take Aways
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What is Ahead?
• CA will continue to lead on GHG reduction policy
• Need agreement across the state as to what our energy priorities are
• That policy will open new opportunities for distributed energy resources
• State regulatory policy and the ways in which we plan for resources will also change
• It is necessary for resources to be integrated with system needs
• Need to incorporate customers in ways they have never been before
• If EPA policies stand, the rest of the nation will be changing as well
• Important to seek regional cooperation
• WE CAN DO THIS!
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Proprietary and Confidential
Questions?
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Mona Tierney-Lloyd, Sr. Director
[email protected]
415.238.3788
www.enernoc.com